Case Brief
The Government of India, on the recommendation of the Reserve Bank of India, imposed a moratorium on Benares State Bank Ltd. under Section 45(2) of the Banking Regulation Act, 1949, effective January 22, 2002 and valid up to and inclusive of April 21, 2002. During the moratorium, the bank was permitted to make only those payments specifically allowed in the order. The release states that the action was taken in the public interest, and in the interest of depositors and the banking system. It also notes that the bank had earlier been placed under RBI directions effective September 25, 2001, which prohibited incurring fresh liabilities and restricted withdrawals from deposit accounts to Rs.1,000, later increased to Rs.2,500 effective October 13, 2001.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Bank
- Location