March 26, 2015
Pioneer Urban Co-operative Bank Ltd., Lucknow placed under
Directions
The Reserve Bank of India has, after
satisfying itself that it is necessary in public interest to do so, issued certain directions to Pioneer Urban
Co-operative Bank Ltd., Lucknow.
The instructions will remain in force for a period of six months, subject to
review from time to time.
Accordingly, Pioneer Urban Co-operative Bank
Ltd., Lucknow, from the close of business
on March 24, 2015, cannot, without prior approval in writing from the Reserve Bank of India, grant or renew any
loans and advances, make any investment,
incur 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. The bank will:
(i) be allowed to pay to a depositor a sum
not exceeding Rs.1,000/- (Rupees one thousand only) of the total balance in every savings bank or
current account or any
other deposit account. If, however, the depositor has any liability to the bank, that is, either as a
borrower or surety, the amount may be adjusted first to the relevant borrowal account/s;
(ii)
be able to
renew the existing term deposits on maturity in the same name and same capacity;
(iii) make such expenditure as permitted in the
Direction;
(iv) not incur or extinguish any other liability
unless specifically approved in writing by the Reserve Bank of India; and
(v) continue to undertake banking business with
restrictions till its financial position improves.
Detailed directions are displayed on the bank’s
premises for interested members of
public to peruse.
The Reserve Bank may consider modifications
of the directions depending upon
circumstances.
The issue of direction by the RBI should not
per se be construed as cancellation
of the banking licence of the bank.
The Reserve Bank of India has issued the
directions in exercise of the powers vested in it under sub-section (1) of Section 35A of the Banking
Regulation Act, 1949 (As
Applicable to Co-operative Societies) read with Section 56 of the Banking Regulation Act, 1949.
