Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949- Kerala Mercantile Co-operative Bank Limited, Kozhikode- Enhancement of withdrawal limit for depositors to ₹50000
Case Brief
RBI reviewed Kerala Mercantile Co-operative Bank Limited, Kozhikode and decided to enhance the withdrawal limit available to depositors under the existing All-Inclusive Directions. The cap has been increased from ₹2,000 to ₹50,000 per depositor, inclusive of the earlier permitted amount, while the rest of the directive continues unchanged.
The bank had been placed under All-Inclusive Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on June 04, 2019 for depositor protection. On review of liquidity and payment capacity, RBI decided to relax only the withdrawal cap, increasing it from ₹2,000 to ₹50,000 per depositor inclusive of the earlier allowance, while keeping all other terms and conditions of the directive unchanged.
Severity Assessment
This is an extension/relaxation of an existing Section 35A All-Inclusive Directions order on a cooperative bank, which is treated as a broad business restriction with severity 4.
Depositors can withdraw up to ₹50,000 per depositor instead of ₹2,000, and more than 89% of depositors are stated to be able to withdraw their entire account balance. The bank continues to operate under the original Section 35A/Section 56 directions, so all other restrictions and conditions remain in force.
Published as Kerala Mercantile Co-operative Bank Limited, Kozhikode
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