Recorded RBI impact
Extension
Business restriction · Extension
Published by RBI
11 Jan 2016
Case Brief
RBI extended the directions already in force against United India Co-operative Bank Ltd., Nagina, Bijnor for three more months, from January 15, 2016 to April 14, 2016, subject to review. Under the directions, the cooperative bank cannot grant or renew loans and advances, make new investments, incur liabilities including fresh deposits, disburse payments, or dispose of assets except as specifically permitted. Depositors may withdraw only up to ₹1,000 per account on one occasion during the entire directions period. The order was issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56, and the RBI clarified that these directions should not be construed as cancellation of the bank’s banking licence.
Why RBI Acted
The Reserve Bank of India extended the existing directions issued to United India Co-operative Bank Ltd., Nagina, Bijnor for a further period of three months from January 15, 2016 to April 14, 2016, subject to review. The directions, imposed under Section 35A of the Banking Regulation Act, 1949 read with Section 56, restrict the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowals and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or transferring assets except as notified. Depositors are permitted to withdraw only up to ₹1,000 from each savings/current/other deposit account on one occasion during the entire directions period.
Operating Impact
The bank remains under strict RBI operational controls through April 14, 2016. It cannot expand lending, raise fresh liabilities, or freely use its assets, and depositors are limited to a one-time withdrawal of up to ₹1,000 per account during the directions period.
Regulatory Basis
- Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Extension
- Order Date
- 15 Jan 2016
- Effective From
- 15 Jan 2016
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank