High court of Bombay at Goa gave major relief to Mapusa Urban Co-Operative Bank by passing interim ex-parte stay order on the restrictions imposed by the Reserve Bank of India and have allowed the bank to carry on with the day to day business on regular basis till the next order. With this relief now MUCB is back into the regular banking transactions such as acceptance of deposits, making payments and expenditures.
Earlier last week the RBI had laid the restriction on the day to transactions of the MUCB and the same was challenged by its acting chairman Gurudas Natekar under Section 35A of the Banking Regulation Act 1949 by filing a petition before the High Court.
The order issued by RBI says, “In the exercise of the powers vested with us under sub section (1) of Section 35 A of Banking Regulation Act, 1949 read with Section 56 of Banking Regulation Act, 1949, it is directed that Mapusa Urban Cooperative Bank of Goa Ltd from the close of business on July 24 not without prior approval in writing from RBI, grant renew of any loans and advances, make any investments, incur any liability such as borroval 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 agreement and sell, transfer or otherwise dispose of any of its properties or assets except to the extent and in the manner – a sum not exceeding Rs 1,000 or the total balance in every savings bank or current account or any other deposit account by whatever name called may be allowed to be withdrawn by a depositor provided that wherever such depositor is having liability to the bank in any manner that is either as a borrower or surety the amount may be adjusted first to the relevant borrowed accounts.”
The counsels of the bank called this order very harsh, arbitrary and uncalled for. They brought to the notice of the High Court that the bank has posted the profit of Rs. 1.95 crore for the financial year ended in March 31, 2015 and the bank also has liquidity to the tune of Rs. 211 Crore. The counsels also further mentioned that the overall performance of the bank is exceptionally well on most of the financial parameters and the bank had made an operating profit of Rs. 6.50 crore for the financial year ended on 31st March 2015. It was also argued that the bank has 24 branches and a large number of account holders and that such direction could only put the customers into further inconvenience.
Meanwhile the banking scenario at Mapusa branch was smooth on Monday with no chaos, the bank opened at the scheduled time on Monday and customers were standing in Q without any stress of the restriction laid by the RBI. In some cases wherein customer wanted to withdraw more cash have been handled by the Manager of the branch politely and assured them that the positive order is expected from the HC and they soon will be in position to withdraw and deposit as much as they need.
There was also discussion on the social media about the RBI restriction claiming that the lost panel of the government has made the provision of RBI restrictions, but the facts are not been verified as yet and hence we cannot quote on this issue, but you as a reader can surely provide the extra information available with you on this issue. Please do not forget to leave your comments and suggestions at the end of this news article.
Source: NT
