Acting on a petition filed by a share holder of REPCO bank, the Madras High Court has issued notice to the Reserve Bank of India to restrain REPCO bank from admitting nominal members and consequently accepting any deposits from them in violation of the apex bank’s norms, reports Press Trust of India.
The petition submits that there is no limit on the contributions that can be received from nominal members of REPCO bank, and as on date, its by-laws provide for acceptance of deposits from nominal members and public without any verification.
The petition adds REPCO had not only permitted the admission of nominal members as against the regulations and guidelines of RBI but has also extended loans and credit facilities to such members, thus affecting the interest of Class A share holders.
