The Reserve Bank of India has issued in exercise of powers vested in it under sub-section (1) of Section 35A of Banking Regulation Act, 1949 (AACS) read with Section 56 of the Banking Regulation Act, 1949, certain Directions to the Bhuj Mercantile Co-operative Bank Ltd., Ahmedabad (Gujarat), whereby as from the close of business as on April 02, 2012, the aforesaid bank shall not, without prior approval in writing from the Reserve Bank of India, grant or renew any loans and advances, make any investment, incur any 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 except to the extent and in the manner as notified in the RBI Directions dated April 02, 2012, a copy of which is displayed on the bank's premises for perusal by interested members of the public.  However, the bank has been permitted to allow withdrawal a sum not exceeding ` 10,000/- of the total balance in every savings or current account or any other deposit account, by whatever name it may be called.

The issue of the above Directions by the RBI should not, per se, be construed as cancellation of banking licence by RBI. The bank will continue to undertake banking business with the restrictions till its financial position improves. These directions shall remain in force for a period of six months from the close of business on April 02, 2012 and are subject to review.

Ajit Prasad
Assistant General Manager

Press Release : 2011-2012/1583