The Reserve Bank of India had previously directed Shri Anand Co-operative Bank Limited, Chinchwad, Pune to stop their operations for the close of business on June 25, 2019. This restriction was extended for six months which was later extended till December 24, 2020. RBI has now further extended the restrictions on the aforementioned bank by six months up to March 24, 2021. This restriction is most likely to create a lot of disappointment from the customers. According to this RBI directive, the customers won’t be able to withdraw money more than Rs. 1,000 of the total amount in the savings account or some other deposit account. Apart from the withdrawal limit, there is also a ban on granting loans, creating investments, borrowing funds, and taking deposits from Anand Co-operative bank.
The central bank notified all their customers saying that the Reserve Bank of India by the powers vested in them have applied sub-section (1) of 35a under Section 56 of the Banking Regulation Act, 1949 to be under effect immediately, up to March 24, 2021, subject to review. The bank said that all the prior terms and conditions will remain unchanged and will continue to be applied. It is important to note that the extension/modification by RBI does not mean that the Reserve Bank of India is satisfied with the financial condition and state of Anand Co-operative Bank. Until the financial state of the bank improves, they will continue to take on their banking businesses with restrictions.
The Anand Co-operative Bank needs to take prior approval from RBI in writing to grant or renew loans, make an investment, borrow funds, disburse payments, enter into a compromise with any entity, sell or transfer any of their assets and properties, or even acceptance of fresh deposits. Everything needs to be first approved by the Reserve Bank of India. This just shows the restrictions that Anand Co-operative Bank had to incur.