Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Ramgarhia Co-operative Bank Ltd, New Delhi – Extension of Period
Case Brief
RBI has continued the existing directions against Ramgarhia Co-operative Bank Ltd., New Delhi, extending the restriction period from January 08, 2024 to April 08, 2024. The release clarifies that this is not a cancellation of the bank’s licence; instead, the bank will keep undertaking banking business subject to restrictions while its financial position improves.
The Reserve Bank of India exercised its powers under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to continue the directions already in force against Ramgarhia Co-operative Bank Ltd., New Delhi. The original directions had started on July 08, 2022 and were previously extended up to January 08, 2024; this release extends them further from close of business on January 08, 2024 to close of business on April 08, 2024, subject to review. RBI also stated that the extension should not be construed as cancellation of the banking licence, and that the bank will continue banking business with restrictions until its financial position improves.
Severity Assessment
This is an RBI Section 35A/Section 56 operating restriction on a co-operative bank, and such directions/extensions are treated as severity 4 business restrictions.
The bank remains under RBI-imposed operating restrictions through April 08, 2024 and must comply with the continuing directions. Depositors and counterparties should expect constrained banking operations, although the licence is not cancelled.
Published as Ramgarhia Co-operative Bank Ltd, New Delhi
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