Banking regulator Reserve Bank of India has issued a direction suggesting that West Bengal-based United Co-operative Bank Limited will continue to be under its close watch. From July 18, 2018, the cooperative bank had been directed to follow RBI”s direction in the case of operations.
In 2018, RBI directed the cooperative bank to grant or renew any loans and advances, make any investment, incur any liability including the borrowing of funds, etc, only after approval from RBI. “Reserve Bank of India has now, in public interest, further extended the directions for a period of two months from April 19, 2021 to June 18, 2021," stated the RBI.
Under sub-section (1) of section 35 A read with section 56 of the Banking Regulation Act, 1949 (AACS) from the close of business on July 18, 2018, the restrictions were imposed by the regulator. This direction was modified from time to time which was last extended up to April 18, 2021.
The regulator stated details of this direction is displayed at the bank’s premises.
The regulator went on to state the above-given directions by RBI should not be construed as a cancellation of banking licence. The bank will continue to undertake banking business with restrictions till its financial position improves. Reserve Bank of India may consider modifications of these directions depending upon circumstances from time to time.