RBI imposes restrictions on Indian Mercantile Cooperative Bank

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New Delhi: The Reserve Bank of India (RBI) has imposed a number of restrictions on the Indian Mercantile Cooperative Bank Ltd, Lucknow on January 28, 2022.

The RBI has also imposed the withdrawal limit, and now the amount of more than one lakh rupees cannot be withdrawn from the bank.

The restrictions have come into force on January 28, 2022, with the end of the working hours in the bank. According to the order, the restrictions issued on Indian Mercantile Cooperative Bank will continue for the next 6 months, after which they will be reviewed and then any further decision will be taken.

The RBI directions also said that “from the close of business on January 28, 2022, 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, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Direction dated January 28, 2022, a copy of which is displayed on the bank’s premises for perusal by interested members of the public.”

The RBI, however, clarified that the above Directions should not per se be construed as cancellation of the banking license by RBI.

“The bank will continue to undertake banking business with restrictions till further notification from RBI. The Reserve Bank may consider modifications of these Directions depending upon circumstances,” the RBI said.

Earlier this week, the Reserve Bank had fined eight cooperative banks for deficiencies in regulatory compliance. (Press Release)

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