Recorded RBI impact
Extension
Business restriction · Extension
Published by RBI
12 Jul 2019
Case Brief
The Reserve Bank of India has further extended the Directions previously issued to United Co-operative Bank Limited, Bagnan Station Road (North), Dist.-Howrah, under Section 35A read with Section 56 of the Banking Regulation Act, 1949. These directions, which had already been extended from time to time and were last valid up to July 18, 2019, are now continued for three months from July 19, 2019 to October 18, 2019. RBI states that the order is not a cancellation of the bank's licence and that the bank will continue to undertake banking business with restrictions until its financial position improves, with possible future modification depending on circumstances.
Why RBI Acted
In public interest, RBI had earlier issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to United Co-operative Bank Limited, Bagnan. The release states that these directions, last extended up to July 18, 2019, have now been further extended for three months from July 19, 2019 to October 18, 2019. RBI reiterates that this should not be construed as cancellation of the banking licence and that the bank will continue banking business with restrictions until its financial position improves.
Operating Impact
The bank remains open, but its operations continue to be constrained by the RBI directions through October 18, 2019. Customers and counterparties must continue to transact with the bank under those restrictions, and the RBI may later modify the directions based on the bank's condition.
Regulatory Basis
- Section 35A of the Banking Regulation Act, 1949
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Extension
- Order Date
- 19 Jul 2019
- Effective From
- 19 Jul 2019
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank