Musiri Urban Co-operative Bank Ltd., Musiri

RBI cancelled the licence of Musiri Urban Co-operative Bank Ltd., Musiri, with effect from the close of business on December 29, 2023. The bank can no longer conduct banking business.

The bank must cease all banking operations immediately, including accepting and repaying deposits. Depositors’ recovery is shifted into liquidation and DICGC insurance, subject to the statutory ceiling of ₹5 lakh per depositor; the release notes that most depositors are entitled to full insured amounts and that DICGC had already paid part of the insured deposits based on depositor consent. The Registrar of Cooperative Societies, Tamil Nadu is expected to move toward winding up and appointment of a liquidator.

• Section 11(1) of the Banking Regulation Act, 1949
• Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949
• Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949

+2 more in the case brief

RBI has extended its existing Section 35A directions on Musiri Urban Co-operative Bank Limited, Musiri. The directions now continue unchanged until close of business on March 02, 2024.

The bank remains subject to the same RBI restrictions and conditions already in force, with the extended period now running until close of business on March 02, 2024. The bank must continue complying with the directive as before, and customers/depositors are affected only to the extent set out in the underlying unchanged restrictions.

• Section 35A read with Section 56 of the Banking Regulation Act, 1949
• subsection (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949

RBI extended its existing directions against Musiri Urban Co-operative Bank Limited, Musiri for another three months. The original terms continue unchanged.

The bank remains subject to the existing RBI operating directions for the extended period, with no change to the previously imposed conditions. The restriction continues to affect the bank's operations until December 02, 2023 unless further reviewed or modified by RBI.

• Section 35A read with Section 56 of the Banking Regulation Act, 1949
• subsection (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949

RBI placed Musiri Urban Co-operative Bank Ltd., Musiri under Section 35A directions with broad restrictions on lending, investments, liabilities, payments, and deposits. Withdrawals from customer accounts were capped at ₹5,000.

The bank must operate under RBI-imposed restrictions for six months from the close of business on March 03, 2023, unless modified sooner. Customers are affected by a withdrawal cap of ₹5,000 and the bank cannot freely expand lending, accept fresh deposits, or undertake several liabilities and asset transactions without RBI approval.

• Section 35 A of the Banking Regulation Act, 1949
• Section 56 of the Banking Regulation Act, 1949
• Section 18A of the DICGC Act (amendment) 2021