The Reserve Bank of India (RBI) in exercise of powers vested in it under sub section (1) of Section 35 A of the Banking Regulation (BR) Act, 1949 read with Section 56 of the BR Act, 1949 has issued certain Directions to Independence Co-operative Bank Limited based in Nashik, Maharashtra due to it’s present liquidity position.
- These directions will remain in force for a period of six months w.e.f. February 10, 2021.
In accordance to the directions, the Chief Executive Officer (CEO) of the bank is restricted on the following:
- To grant or renew any loans and advances without prior approval of RBI in writing.
- Make any investment
- Incur any liability including borrowal of funds and acceptance of fresh deposits
- Disburse any payment whether in discharge of its liabilities and obligations or otherwise
- Enter into any compromise or arrangement and sell or transfer
Also, 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from the total balance across all savings bank or current accounts or any other account of a depositor is allowed to be withdrawn, but are allowed to set off loans against deposits subject to the above mentioned conditions.
Is consumer Interest Protected?
Yes, 99.89% of the depositors are fully covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance scheme. Under the DICGC Act, 1961, every depositor is entitled to repayment of his/her deposits up to Rs 5,00,000 from the DICGC.
Recent Related News:
i.On January 8, 2021, the Reserve Bank of India (RBI) cancelled the licence of Osmanabad (Maharashtra)-based Vasantdada Nagari Sahakari Bank Ltd.to carry on banking business with immediate effect under Section 22(1) read with Section 56 of Banking Regulation (BR) Act, 1949.
ii.Banking Licence of Subhadra Local Area Bank at Kolhapur, Maharashtra under Section 22 (4) of the Banking Regulation Act, 1949 was cancelled by RBI with immediate effect from December 24, 2020.
About Deposit Insurance and Credit Guarantee Corporation(DICGC):
Establishment– 1978
Chairman– Michael Debabrata Patra (Deputy Governor, RBI)
Headquarter– Mumbai, Maharashtra
About Reserve Bank of India (RBI):
Headquarters– Mumbai, Maharashtra
Establishment – 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, and M Rajeswar Rao)
