The Hiriyur Urban Co-operative Bank Ltd., Hiriyur

RBI cancelled the licence of The Hiriyur Urban Co-operative Bank Ltd., Hiriyur, Karnataka. The bank must cease banking business immediately and winding-up proceedings are to follow.

The bank must stop all banking operations immediately, including acceptance and repayment of deposits. Depositors can claim insurance up to the statutory ceiling of Rs 5 lakh through DICGC, and winding-up/liquidation proceedings are expected to follow.

• 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 the existing Directions on The Hiriyur Urban Co-operative Bank Ltd. by another three months. The directive continues unchanged from December 10, 2023 to March 10, 2024, subject to review.

The bank remains subject to the same RBI operating conditions and any restrictions contained in the directive through March 10, 2024, unless reviewed earlier. This continues to affect the bank’s operations and the interests of its depositors and other stakeholders under the standing Section 35A / Section 56 order.

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

RBI extended its existing Directions against The Hiriyur Urban Co-operative Bank Ltd., Hiriyur for another three months. The underlying terms stay unchanged.

The bank continues to operate under the same RBI-imposed restrictions through December 10, 2023, subject to review. Customers and counterparties remain affected by whatever operational limits were already in place under the original directive, with no relaxation announced in this release.

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

RBI imposed Section 35A directions on The Hiriyur Urban Co-operative Bank Ltd., restricting lending, deposits, payments, and withdrawals. The bank will continue operating only under these conditions for six months.

The bank must operate under strict restrictions from March 10, 2023 for six months unless the RBI modifies or withdraws the directions. Depositors cannot withdraw balances from their accounts except to the limited extent permitted, and the bank cannot expand liabilities, extend new credit, or freely transact with assets 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