Shree Ganesh Sahakari Bank to be under RBI 'directions' till December 29, 2018

The Reserve Bank Wednesday extended the five-year-old restrictions on business activities of Nashik-based urban cooperative lender Shree Ganesh Sahakari Bank by another three months. 

It, however, clarified that the action should not be construed as a cancellation of banking license by the apex bank. As per the extension, the cooperative lender will be under "directions" till December 29, 2018, it said. 

The directions were first issued in April 2013, under which withdrawals by depositors were capped at Rs 1,000 of the total balance held in every account. 

It also barred Shree Ganesh Sahakari Bank from granting or renewing any loans and advances, making any investment, incurring any liability including borrower of funds and accepting fresh deposits, without RBI nod. 

The RBI had also barred the bank from disbursing or agreeing to disburse any payment whether in the discharge of its liabilities and obligations or otherwise, or enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets. 

In 2013, it had said that the lender will continue to undertake banking business but with restrictions to its financial position improves. 

Meanwhile, the central bank also imposed an Rs 15-lakh penalty on Millath Co-operative Bank, Davangere, Karnataka for sanctioning loans to directors and their relatives, vehicle loans/staff loans without documents and not reporting cash transactions of above Rs 10 lakh a month to the Financial Intelligence Unit. 

The RBI said a show-cause notice was first issued to the Karnataka-based lender, and the fine was imposed after hearing their side, once the violations were substantiated and warranted imposition of monetary penalty.

(With inputs from agencies.)