Directions under Section 35 A read with section 56 of the Banking Regulation Act, 1949- Kerala Mercantile Co- operative Bank Ltd., Kozhikode, Kerala- Withdrawal of directions
Case Brief
The Reserve Bank of India had earlier placed Kerala Mercantile Co-operative Bank Ltd., Kozhikode under Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, and those directions were extended and modified over time. The latest modification had allowed limited withdrawals of up to ₹50,000 from deposit accounts, subject to conditions. In this release, RBI states that it is withdrawing those directions, effective August 28, 2020.
The Reserve Bank of India had issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Kerala Mercantile Co-operative Bank Ltd., Kozhikode on May 29, 2019, and those directions were extended and modified from time to time. In the last modified version dated June 19, 2020, depositors were allowed to withdraw up to ₹50,000 from savings, current, or other deposit accounts, subject to conditions. The RBI then withdrew those directions with effect from August 28, 2020, in exercise of its powers under Section 35A(2) read with Section 56.
Severity Assessment
This is a withdrawal of prior directions, so it imposes no forward-looking adverse impact and severity is 0.
From August 28, 2020, the earlier operating restrictions no longer apply. Depositors are no longer constrained by the withdrawn direction’s withdrawal cap, subject to any other applicable rules or directions not mentioned in this release.
Published as Kerala Mercantile Co- operative Bank Ltd., Kozhikode, Kerala
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