In a press release the Reserve Bank of India has said that it is satisfied that in the interest of the public, it is necessary to issue certain directions to Gokul Co-operative Urban Bank Ltd., Secunderabad.
Accordingly, the Reserve Bank of India, in exercise of the powers vested in it Gokul Co-operative Urban Bank from the close of business on April 04, 2016 shall not, without prior approval in writing from the Reserve Bank of India, grant or renew any loans and advances.
The direction further says the UCB would not make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations. It goes on listing the usual restrictions.
The detailed directions are displayed on the bank’s premises for the interested members of public to peruse. The Reserve Bank may consider modifications of the directions depending upon circumstances, it says further.
The issue of directions by the RBI should not per se be construed as cancellation of banking licence by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. These directions shall remain in force for a period of six months from the close of business on April 04, 2016 and are subject to review from time to time, RBI clarifies.