Reserve Bank of India has issued certain directions to Pioneer Urban Co-operative Bank, Lucknow. The instructions will remain in force for a period of six months, subject to review from time to time, reads a press release from the regulator.
Accordingly, Pioneer Urban Co-operative Bank Ltd., Lucknow, from the close of business on March 24, 2015, cannot grant or renew any loans and advances or make any investment and other activities without seeking clearance from the apex bank.
The bank will be allowed to pay to a depositor a sum not exceeding Rupees one thousand of the total balance in every savings bank or current account or any other deposit account. If, however, the depositor has any liability to the bank, that is, either as a borrower or surety, the amount may be adjusted first to the relevant borrowal account.
Detailed directions are displayed on the bank’s premises for interested members of public to peruse.The Reserve Bank may consider modifications of the directions depending upon circumstances.
The issue of direction by the RBI should not per se be construed as cancellation of the banking licence of the bank, clarifies the release.