RBI lifts restrictions on People’s Co-operative Bank in UP

The Reserve Bank of India (RBI), has extended restrictions to People’s Co-operative Bank Limited Kanpur for an additional period of three months, from September 11th to December 10.

Through directives under Section 35A (Bank Regulation Act, 1949) (AACS), the bank has been subject to restrictions since June 10, 2020.

“The validity of the directive, which was last extended up to September 10, 2021 has further been extended for a period of three months from September 11, 2021 to December 10, 2021 vide directive DOR.MON.D-35/12.28.059/2021-22 dated September 8, 2021 subject to review,” said an RBI statement on Saturday.

Section 35A of 1949’s Banking Regulation Act gives the authority to the central bank to direct banks and to take action to stop any affairs of any bank company being conducted in a way that is detrimental to the interest of depositors or prejudicial to the banking company’s interests.

The directives state that the Kanpur-based cooperative bank was prohibited from accepting deposits or granting new loans for six months, without the RBI’s approval. This is due to its poor financial situation.

“In particular, no amount from any savings bank, current account, or other account of a depositor may ever be withdrawn,” said the RBI in a statement issued on June 11, 2020.