The CKP Co-operative Bank cannot, without approval in writing from the RBI, grant or renew any loans and advances, make any investments, incur any liabilities including borrowing of funds and acceptance of fresh deposits, according to the central bank’s directions.
Further, the Mumbai-based bank cannot disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions issued on April 30.
The RBI said, in particular, a sum not exceeding ₹1,000 of the total balance held in every savings bank or current account or any other deposit account by whatever name called, may be allowed to be withdrawn by a depositor, subject to the conditions stipulated in the above RBI Directions. The issue of the above Directions should not per se be construed as cancellation of banking licence by RBI, the central bank said in a statement.
In 2012, RBI had imposed a monetary penalty of ₹5 lakh on CKP for violating guidelines, among others, on extending finance to borrowers outside its area of operations, exceeding exposure to housing and real estate, single party exposure limit, loans to directors, issuing bank guarantee to an entity not banking with them, exceeding individual limit of unsecured advances, and sanctioning overdraft against third-party FDs to one of its directors.
The bank, which operates through eight branches, will continue to undertake banking business with restrictions till its financial position improves, it said.