The Reserve Bank of India has placed Mumbai-based Kapol Co-operative Bank under ‘directions’.
According to the directions, depositors will be allowed to withdraw a sum not exceeding ₹3,000 of the total balance held in every saving bank or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI directions.
The 77-year old co-operative bank will, without prior approval in writing from the Reserve Bank, also not be able to grant or renew any loans and advances, make any investment, the RBI said in a statement.
Further, the bank cannot 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, enter into any compromise or arrangement and sell, transfer or otherwise dispose any of its properties or assets except as notified in the RBI directions.
The RBI said the directions have been issued from the close of business on March 30.
The issue of Directions, according to the RBI, should not, per se , be construed as cancellation of banking licence.
“The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these directions depending upon circumstance,” the central bank said.
The directions, said the RBI, are imposed in exercise of powers vested in the Reserve Bank of India under the Banking Regulation Act, 1949.