Punjab Maharashtra Co-op Bank and The Law
Punjab Maharashtra Co-op Bank and The Law
The Law
The Reserve Bank of India’s (RBI) directions on the Punjab and Maharashtra Co-operative Bank is not a one-off event, though customers are worried.
“The directions are imposed in exercise of powers vested in the Reserve Bank under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act,” the RBI said in a statement, adding that it should not be seen as a cancellation of the banking license.
What do these Acts state?
Section 35(A) of the Banking Regulation Act says that the RBI in public interest and to “to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or to secure the proper management of any banking company generally” can issue directions to these entities. Section 56 of the Act applies to cooperative societies.
@ Dayanand Nene
The Law
The Reserve Bank of India’s (RBI) directions on the Punjab and Maharashtra Co-operative Bank is not a one-off event, though customers are worried.
“The directions are imposed in exercise of powers vested in the Reserve Bank under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act,” the RBI said in a statement, adding that it should not be seen as a cancellation of the banking license.
What do these Acts state?
Section 35(A) of the Banking Regulation Act says that the RBI in public interest and to “to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or to secure the proper management of any banking company generally” can issue directions to these entities. Section 56 of the Act applies to cooperative societies.
@ Dayanand Nene
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