It is hereby notified for information of the public that in exercise of powers vested in it under sub section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India (RBI) vide Directive Ref. No. CO.DOS.SED.No.S1931/12-23-001/2024-2025 dated June 12, 2024, has issued certain Directions to The Amanath Urban Co-operative Bank Ltd., Bangalore, (the bank) whereby, as from the close of business on June 12, 2024, the bank shall not, without prior approval of RBI in writing, 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 as notified in the RBI Direction dated June 12, 2024. In particular, a sum not exceeding ₹60,000 (Rupees Sixty thousand only) of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn subject to the conditions stated in the above RBI Directions. The bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, etc. as specified in the said Directions.

2. These directions are necessitated due to material supervisory concerns observed in the bank by the Reserve Bank, such as, poor financials including large accumulated losses and the bank having negative Net Worth for past several years, and concerns related to corporate governance particularly in the operations of One Time Settlement scheme by the bank.

3.  The eligible depositors of the bank would be entitled to receive deposit insurance claim amount for  their deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) in the same capacity and in the same right, within 90 days, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the Deposit Insurance and Credit Guarantee Corporation  Act, 1961 based on submission of willingness by the concerned depositors and after due verification.  Details may also be accessed on the DICGC website: https://www.dicgc.org.in/. As per the information currently available with the Reserve Bank, more than 99 per cent of the depositors of the bank will be covered by DICGC for their entire account balance. 

4. The issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI. Subject to the restrictions specified in the said Directions, the bank will continue to undertake its banking business, including recovery of loans. The Reserve Bank is monitoring the position of the bank and will continue to take necessary steps, including modifications of these Directions depending upon circumstances, in the interest of depositors.

5. These Directions shall remain in force for a period of six months from the close of business on June 12, 2024 and are subject to review.

(Puneet Pancholy)     
Chief General Manager

Press Release: 2024-2025/486