RBI Bars People’s Co-operative Bank Public Transactions For 6 Months

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Mumbai: The Reserve Bank of India (RBI) on Thursday barred Kanpur-based People’s Co-operative Bank from carrying out certain public transactions till further notice, reported The LiveMint.

Granting of loans and accepting deposits for a period of six months will not be allowed due to the bank’s weak financial position. Further, the central bank said, “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the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn.” Selling, transferring, or disposing of any of its properties or assets remains unduly debarred.

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

Reportedly, these directions will remain in force for six months from the close of business on June 10 and will be subjected to review. However, RBI clarified that the directions should not be interpreted as a cancellation of the banking license of the co-operative bank. It shall continue to undertake banking business with restrictions until its financial position improves.

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