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The Reserve Bank of India (RBI) on Wednesday said it has barred Kerala-based Thodupuzha Urban Co-operative Bank Ltd from offering basic services like granting any loans and advances or making any investment or acceptance of fresh deposits.
"Considering the bank's present liquidity position, no amount from the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions," RBI said in a statement. The RBI issued a direction in this regard on August 23, 2022. The direction is effective from the close of business on August 23, 2022. As per the direction, "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 August 23, 2022, a copy of which is displayed on the bank's website and its premises for perusal by interested members of the public." However, the central bank clarified that "the issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances." These directions shall remain in force for a period of six months from the close of business on August 23, 2022, and are subject to review, the RBI said. (ANI)
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