RBI places 3 urban co-operative banks under Directions

BL Mumbai Bureau | Updated on: Jul 30, 2022
The central bank has said the UCBs can continue to undertake banking business with restrictions till their financial position improves.

The central bank has said the UCBs can continue to undertake banking business with restrictions till their financial position improves.

One UCB from AP and two from Maharashtra placed under Directions

The Reserve Bank of India has placed three urban co-operative banks (UCBs) -- Durga Co-operative Urban Bank, Vijayawada; Jaiprakash Narayan Nagari Sahakari Bank, Basmatnagar; and The Karmala Urban Co-operative Bank, Solapur -- under Directions.

Durga Co-operative Urban Bank

In the case of Durga Co-operative Urban Bank, Vijayawada (Andhra Pradesh), RBI said the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review.

Restrictions have been placed on deposit withdrawals under the Directions.

Depositors will be allowed to withdraw a sum not exceeding ₹1.50 lakh of the total balance across all savings bank or current accounts or any other account, subject to conditions stated in the Directions for it.

Jaiprakash Narayan Nagari Sahakari Bank

In the case of Jaiprakash Narayan Nagari Sahakari Bank, Basmatnagar (Maharashtra), RBI said the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review.

“Considering the bank’s liquidity position, no amount from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions,” a RBI statement said.

The Karmala Urban Co-operative Bank

In the case of The Karmala Urban Co-operative Bank, Solapur (Maharashtra), the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review.

RBI has placed restrictions on deposit withdrawals under the Directions.

Depositors will be allowed to withdraw not more than ₹10,000 of the total balance across all savings bank or current accounts or any other account, subject to the conditions stated in the Directions.

Under the Directions, these UCBs cannot, without prior approval of RBI, grant or renew any loans and advances, make any investment, incur any liability, including borrowal of funds and acceptance of fresh deposits, among others.

The central bank said the issue of the above Directions should not per se be construed as cancellation of banking licence.

The UCBs will continue to undertake banking business with restrictions till their financial position improves.

The Reserve Bank may consider modifications of the Directions depending upon circumstances.

Published on July 30, 2022
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