The Reserve Bank of India (RBI) in exercise of powers conferred under sub section (1) of Section 35A of the Banking Regulation (BR) Act, 1949, read with Section 56 of BR Act, 1949 imposes restrictions on Thodupuzha Urban Co-operative Bank, Kerala for 6 months starting August 23, 2022, and are subject to review.
What are the restrictions imposed by the RBI on bank?
i.The bank needs prior approval of RBI in writing to 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, enter into any compromise or arrangement and sell, transfer or dispose of any of its properties, among others.
ii.No amount from the total balance across all savings bank or current accounts or any other account of a depositor is allowed to be withdrawn, but are allowed to set off loans against deposits, subject to the conditions.
It should be noted that the above Directions by the RBI are not regarded as cancellation of banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves.
RBI lifts the business restrictions imposed on American Express Banking Corp
The RBI has lifted the restrictions imposed on American Express Banking Corp. (AEBC) after the latter has demonstrated satisfactory compliance with regard to Storage of Payment System Data.
- American Express is a payment system operator authorized to operate card networks in the country under the Payment and Settlement Systems Act, 2007.
Background:
In April 2021, RBI imposed restrictions on American Express Banking Corp. from on-boarding new domestic customers onto its card network from May 01, 2021 for non-compliance with the RBI’s notification on Storage of Payment System Data.
- This supervisory action has been taken in exercise of powers vested in it under Section 17 of the Payment and Settlement Systems (PSS) Act, 2007.
Recent Related News:
i.RBI in exercise of powers vested under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) of BR Act, 1949 has imposed a monetary penalty of Rs 1,05,00,000 (Rs 1 crore and 5 lakh ) on Kotak Mahindra Bank Limited.
ii.In July 2022, RBI also imposed restrictions on three urban co-operative banks (UCBs) including Durga Co-operative Urban Bank, Jaiprakash Narayan Nagari Sahakari Bank and Karmala Urban Co-operative Bank for 6 months.
About American Express Banking Corp (AEBC) India:
Interim CEO and COO– Sanjay Khanna
Headquarters– Gurugram, Haryana
