The Reserve Bank of India has placed the Kerala Mercantile Co-operative Bank based in Kozhikode under Directions last month. According to the Directions, several restrictions would work on the UCB now.
Kerala Mercantile Co-operative Bank, without prior approval in writing from the Reserve Bank, will also not be able to grant or renew any loans and advances or make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, etc.
The Directions shall remain in force for a period of six months from the close of business of the bank on June 4, 2019. A copy of the directions is displayed at the bank’s premises for perusal by interested members of public.
The issue of the directions by the Reserve Bank should not, per se, be construed as cancellation of banking licence by the Reserve Bank. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications to these directions depending upon circumstances.