Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 (AACS) – The City Co-operative Bank Ltd., Mumbai, Maharashtra- Extension of period
Case Brief
The Reserve Bank of India extended the directive originally issued on April 17, 2018 against The City Co-operative Bank Ltd., Mumbai. The extension keeps the bank under the same Section 35A read with Section 56 restrictions from October 18, 2018 to April 17, 2019, subject to review. RBI also clarified that the extension should not be read as evidence of substantive improvement in the bank's financial position.
The bank had earlier been placed under directions on April 17, 2018. RBI, exercising powers under Section 35A read with Section 56 of the Banking Regulation Act, 1949 (as applicable to co-operative societies), continued the same directive for another six months, subject to review. The release says this extension should not be construed as RBI being satisfied with the bank's substantive improvement in financial position.
Severity Assessment
An extension of Section 35A directions on a cooperative bank is a broad business restriction and is explicitly rated severity 4.
The bank remains subject to the existing operational directions through April 17, 2019, and the restrictions continue to govern its activities during the extension period. Public notice was also displayed at the bank’s premises.
Published as The City Co-operative Bank Ltd., Mumbai
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