Customers were in for a shock as soon as the RBI on 10th January put the Sri Gururaghavendra Sahakara Bank Niyamitha, Bengaluru under direction.
In a press release RBI said “It is hereby notified for information of the public that in exercise of powers vested in it, RBI has issued certain Directions to Sri Gururaghavendra Sahakara Bank Niyamitha, Bengaluru, Karnataka.”
“From the close of business on January 10, 2020, the aforesaid 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.” read the notice further.
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.
These Directions shall remain in force for a period of six months from the close of business of January 10, 2020 and are subject to review.