The Reserve Bank of India (RBI) further extended sanctions that were imposed on the Madgaum Urban Cooperative Bank Ltd (MUCB) by an additional three months to June 2. The RBI had also recently issued a show cause notice to the bank giving it a month’s time to respond on why its license should not be withdrawn and begin liquidation of the bank.
On Tuesday, the RBI in a press statement said it had further extended its directions which were issued till March 2 for another three months. “It is hereby notified for the information of the public that, the Reserve Bank of India, in exercise of powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that the Directive dated April 26, 2019, issued to The Madgaum Urban Co-operative Bank Ltd., Margao, Goa as modified from time to time, the validity of which was last extended up to March 2, 2021, shall continue to apply to the bank for a further period of three months from March 3, 2021 to June 02, 2021, as per the Directive dated March 2, 2021, subject to review,” said the press release issued by RBI’s chief general manager Yogesh Dayal.
It further stated all other terms and conditions of the directives would remain unchanged and a copy of the notified directives would be displayed at the bank’s premises for the perusal of the public.
The bank was first placed under directives from the RBI in April 2019 and was directed to limit withdrawals for a six month period which was then extended from time to time. The bank’s plans of merger with other banks also fell flat and they had written to the RBI of its current state.