RBI extends restrictions on Punjab-based Hindu Co-operative Bank

Mumbai: The Reserve Bank of India (RBI) has extended the restrictions on Hindu Co-operative Bank Limited, based out of Pathankot, Punjab, in terms of withdrawal and deposit limits along with grant of loans, till September 24, 2021.

RBI had first imposed the restrictions with effect from the close of business on March 25, 2019, under Sub-Section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949(AACS), in the public interest in view of the weakened financial condition of the bank.

The validity of the directions has been extended from time to time and were last extended till June 24, 2021.

"These directions shall continue to apply to the bank for a further period of three months from June 25, 2021 to September 24, 2021, subject to review," said an RBI statement on Friday.

The central bank further said that it may consider modifications in directions depending upon the circumstances and the issue of directions should not per se be construed as cancellation of banking license.

"The bank will be able to undertake banking business with restrictions till its financial position improves," it said.

The notification dated March 13, 2019 by the central bank said that without prior approval, the bank will not be able to grant or renew any loan, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, among others.