The Reserve Bank of India put directions on the Bangalore (Karnataka) based National Cooperative Bank on Monday. The Directions shall remain in force for a period of six months from the close of business on July 24, 2023 and are subject to review.
According to the RBI press release, the National Co-operative Bank Ltd., Bangalore, whereby, as from the close of business on July 24, 2023, the bank shall not, without prior approval of RBI in writing grant or renew any loans and advances, 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 or otherwise, etc.
Besides, in particular, a sum not exceeding Rs 50,000 (Rupees Fifty thousand only) of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn subject to the conditions stated in the above RBI Directions.
The issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances, reads the RBI press release.