RBI imposes severe restrictions on Kapol Cooperative Bank

IANS 31 March 2017

Mumbai, The Reserve Bank of India on Friday imposed stringent restrictions on the Kapol Cooperative Bank Ltd. (KCBL) and barred depositors from withdrawing over Rs 3,000 from any type of accounts, according to a notification.

The RBI has also restricted the financially troubled bank from granting or renewing loans and advances or making any investments, incurring any liability including borrowal of funds, and accepting fresh deposits without prior written approval of the apex bank.

The KCBL will also not be able to enter into any compromise or arrangements, sell, transfer or dispose of any of its assets and properties as per the RBI's directions.

However, the RBI made it clear that this should not be construed as cancellation of banking licence of KCBL, and the bank can continue business with restrictions till its financial position improves.

The latest move comes nearly three years after the RBI had appointed an administrator and later superseded the Mumbai-headquartered KCBL's board in June 2014 due to its weak capital adequacy and high-level non-performing assets.

Founded in 1939, the KCBL has around 20 branches in Mumbai and Gujarat with over 77,000 shareholders and a customer-base of around 250,000.

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Comments

User

Sanjeev B

9 years ago

The bank was warned in 2014. This is the second offence, they need to now wind up. Move quickly and auction their property assets, pay back the creditors and depositors. Sell their loan portfolio at discount to the highest bidder. This needs to be cleaned up quickly and made an example that the RBI means business. We have to move ahead as a country, we can't be doing business like this forever.

Gurudutt Mundkur

9 years ago

Again, the watch dog --- the Urban Co-operatives Department caught napping.

SRINIVAS SHENOY

9 years ago

Has the RBI and the Cooperative Department, initiated appropriate action against the Bank Auditors, Fraudsters, Bank Staff and Bank Management for this high level non performing assets which is the need of the hour? The same was the situation with the CKP Cooperative Bank, where a regular extension is given, resulting in draining the scarce financial resources of the bank, resulting in the hapless depositors mainly Senior Citizens, loosing their hard earned life savings.