However, the RBI has clarified that its instructions should not be seen as canceling the license of the bank.
The Reserve Bank of India (RBI) has extended the cash withdrawal and other restrictions on the Kolikata Mahila Cooperative Bank Limited, Kolkata for six months. This ban will be effective from 10 January 2020 to 9 July 2020. In July last year, the central bank banned this cooperative bank from granting or renewing loans, making any kind of investment, raising any bill bill, making a new deposit or making any payment without the written permission of RBI. The RBI had allowed depositors to withdraw up to Rs 1,000 only. On Tuesday this week, the central bank has extended the restrictions on this cooperative bank for another six months.
Instructions to be done in bank premises
The RBI said in a statement issued on 14 January 2020, ‘In the public interest, the RBI is using the powers vested under sub-section (1) of the Banking Regulation Act, 1949 (AACS) and Section 35A of the Kolikata Mahila Cooperative. Bank Limited, Kolkata, West Bengal was issued a directive to ban its business on 9 July 2019 till 9 January 2020. Now, in view of public interest, the Reserve Bank has increased it to 9 July 2020 for a further period of six months. It is also mandatory to paste a copy of this instruction for the attention of common people in the bank premises.
Bank’s line does not cancel
The central bank, however, has clarified that its instructions should not be seen as canceling the license of the bank. RBI said, ‘The instructions given by the Reserve Bank should not be seen as cancellation of banking license. The bank will continue its banking business with restrictions till the financial condition improves. RBI will change its instructions from time to time depending on the circumstances.