Directions under Section 35 A read with Section 56 of the BR Act (AACS), 1949 - Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala - Extension of period
Case Brief
The Reserve Bank of India has extended the existing directions issued to Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala under Section 35A read with Section 56 of the Banking Regulation Act, 1949. The directive, originally issued on May 29, 2019 and last extended up to June 04, 2020, will now continue from June 05, 2020 to December 04, 2020, subject to review. The release states that all other terms and conditions of the directive remain unchanged.
The Reserve Bank of India reviewed the financial position of Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala and found it necessary in public interest to continue the directions originally issued under Section 35A read with Section 56 of the BR Act, 1949. The order extends the validity of the existing directive, with all other terms and conditions remaining unchanged, for a further six months from June 05, 2020 to December 04, 2020, subject to review.
Severity Assessment
This is an RBI Section 35A/Section 56 directions extension for a cooperative bank, which is treated as a broad business restriction with severity 4.
The bank remains under the same RBI-imposed operational restrictions for the extension period, and the restrictions continue to affect its activities until December 04, 2020 unless further reviewed or modified. Depositors and counterparties remain subject to the constraints flowing from the directions.
Published as Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala
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