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RBI bars People's Co-operative Bank from granting fresh loans and accepting deposits for six months

PTI   

RBI bars People's Co-operative Bank from granting fresh loans and accepting deposits for six months
Business1 min read
The Reserve Bank of India (RBI) on Thursday barred Kanpur-based People's Co-operative Bank from granting fresh loans and accepting deposits for six months, due to its weak financial position. The RBI also said no withdrawal of amount of a depositor will be allowed from the co-operative bank.

"As from the close of business on June 10, 2020, the bank shall not, without prior approval of RBI in writing grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise," the RBI said in a release.

The central bank has barred the co-operative bank from selling, transferring or disposing any of its properties or assets.

"In particular, no amount of the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn," the central bank said.

These directions will remain in force for six months from the close of business on June 10 and are subject to review, it said.

The central bank, however, clarified that the directions should not be construed as cancellation of banking licence of the co-operative bank.

The bank will continue to undertake banking business with restrictions till its financial position improves, it said.

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