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HDFC Bank to refund GPS device commission to auto loan customers

Banking & Finance

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The irregularities in the auto loan portfolio pertains to the charges that some executives of the bank had forced borrowers to buy GPS devices bundled with auto loans.

The country’s largest private sector lender, HDFC Bank, will refund the GPS device commission to customers who had availed of such device as part of auto loans between FY14 and FY20. In a public notice that appeared on the newspaper on Thursday, the lender said the refund will be credited to the customer’s bank account as registered with lender.

FE has learnt that HDFC Bank is refunding the amount to customers according to directions received from the Reserve Bank of India (RBI). The total refund amount as GPS commission could be to the tune of Rs 40 crore, sources said.

“The notice is hereby given that HDFC Bank Limited (Bank) will be refunding the GPS device commission to auto loan customers who availed of such device as a part of the auto loan funding during the period FY 2013-14 to FY 2019-20,” the lender said in the public notice.

“The refund will be credited to the customer’s repayment bank account as registered with the bank. In case of any queries or in case such bank account is closed, such customers are requested to contact the bank from their registered email ID or call on the below given toll free number with the details of the auto loan account number within the next 30 days,” the notice further read.

Last Month, the RBI had slapped a penalty of Rs 10 crore on HDFC Bank due to deficiencies in regulatory compliance in the GPS device commission case. The regulator, however, said the penalty was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. The regulator has imposed the penalty after considering the bank’s reply to the show-cause notice.

The irregularities in the auto loan portfolio pertains to the charges that some executives of the bank had forced borrowers to buy GPS devices bundled with auto loans. The misconduct by bank officials was acknowledged by former MD and CEO Aditya Puri in the bank’s AGM when he had said an internal probe was conducted against a few erring employees and appropriate action was taken.

“We had received some whistle-blowing complaints, internal enquiries carried out in the matter on the complaints received has not brought out any conflict-of-interest issue, nor does it have any bearing on our loan portfolio,” Puri said at the company’s annual general meeting on July 18, 2020.

Email queries sent to HDFC Bank did not elicit any response till the time of filing this copy.

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Bad bank: Govt guarantee seen costing Rs 30,600 crore

Personal Finance

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Of the 101 non-performing assets (NPAs) initially reviewed, banks have zeroed in on 22 accounts amounting to roughly Rs 89,000 crore for transfer to NARCL in the first phase.

The Indian Banks’ Association (IBA) has estimated that the government may have to fork out not more than Rs 30,600 crore if it offers guarantee on the security receipts (SRs) issued by the National Asset Reconstruction Company (NARCL) while acquiring bad loans from lenders, a top banker told FE.

“The prospects of recovery from some of the bad loans look promising. So, government guarantee on SRs, subject to its approval, may not cost more than this amount. Details are being worked out by the IBA, and NARCL will be operationalised soon,” he said.

Although the government backed the setting up of NARCL, it wouldn’t infuse capital into it; instead, participating banks would put in the equity. Nevertheless, bankers expect the government to give guarantee on the SRs, which will make the resolution process more viable and attractive.

Earlier, financial services secretary Debasish Panda had said banks would have the option to transfer several large stressed assets (of at least Rs 500 crore each) worth Rs 2.25 lakh crore to NARCL initially.

The IBA, which is spearheading efforts to establish NARCL, has zeroed in on five consultants to expedite the process. It has sought quotations from SBI Capital Markets and Oliver Wyman for advisory services; from E&Y for tax consultations; AZB & Partners for legal consultations; and AON Consulting for HR services.

NARCL is expected to acquire stressed assets at net book value by offering 15% of it upfront (in cash), and the rest (85%) in SRs. Once the bad loan is resolved, realisation for the relevant bank would be in sync with its SR interest in that asset.

The IBA is also working out an “exit strategy” for those accounts that remain unresolved even after five years, said the banker.

Of the 101 non-performing assets (NPAs) initially reviewed, banks have zeroed in on 22 accounts amounting to roughly Rs 89,000 crore for transfer to NARCL in the first phase.

Already, the IBA has formed a core committee headed by its chairman (Union Bank of India managing director Rajkiran Rai) for setting up NARCL and the Indian Asset Management Company. The committee also comprises IBA chief executive Sunil Mehta, State Bank of India MD J Swaminathan, IDBI Bank MD and CEO Rakesh Sharma and ICICI Bank executive director Sandeep Batra.

The proposed asset management company, comprising professionals, will be set up within the broader NARCL structure that will work out the toxic assets and take appropriate decisions, including on selling them off to investors.

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Banks’ microfinance gross loan portfolio grows, SFBs see de-growth: Report

Banking & Finance

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The portfolio outstanding of microfinance sector stood at Rs 2.54 lakh crore as of March 2021, with 10% quarter-on-quarter growth and 8.4% year-on-year growth.

The gross loan portfolio (GLP) of banks in the microfinance sector grew 15.5% year-on-year to Rs 1.06 lakh crore at the end of the previous fiscal while that of small finance banks (SFBs) de-grew 6.6% y-o-y to Rs 41,708 crore, according to a report published by credit bureau CRIF High Mark.

The 15th edition of CRIF MicroLend, released on Thursday, showed that banks continued to dominate the microfinance market with a portfolio share of 42% at the end of FY21, up from 39.4% in FY20. Significantly, SFB’s market share in the last fiscal declined to 16.4% from 19.1%.

During the third quarter of FY21, the market share of banks and SFBs stood at 41.7% and 16.9%, respectively, in the microfinance space. Between Q4FY20 and Q3FY21, NBFC-MFIs’ market share stood almost the same at around 30%, while it grew to 30.6% at the end of Q4FY21.

Interestingly, earlier this month, P N Vasudevan, managing director and CEO of Equitas Small Finance Bank, said its conscious plan to grow the unsecured micro finance book at a “slower pace’ compared to the rest helped mitigate the overall credit cost impact. “As of March 31, 2021, the unsecured microfinance advances were 18% while the remaining 81% were secured loans. The least impacted product, small business loans secured by house property, constitutes 45% of the total advances,” Vasudevan said.

“Microfinance industry demonstrated strong resilience and recovered in Q2 after muted business in Q1FY20-21. Loan disbursements in Q3 and Q4 of FY21 were similar to previous year’s respective quarters,” said Vipul Jain, head of products, CRIF High Mark, while releasing the report.

The portfolio outstanding of microfinance sector stood at Rs 2.54 lakh crore as of March 2021, with 10% quarter-on-quarter growth and 8.4% year-on-year growth.

“Delinquency was higher in Q3 and Q4 of FY20-21 compared to pre-Covid levels. We hope to see these numbers move back to their historic levels in coming quarters,” Jain said.

The report said early delinquency (1- 30 days) reduced by 3.6% in March 2021 compared to December 2020 from 8.7% to 5.1%. Microfinance loans with repayment delays of over 30 days (30+% delinquency) remained high for West Bengal, Assam and Maharashtra.

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Reserve Bank of India – Tenders

Tenders

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In connection with Tender, which was floated on RBI website on June 03, 2021 for the captioned work, a Pre-bid meeting was conducted at 11.30 AM on June 17, 2021 at 5th floor, conference room, Reserve Bank of India, Main Office Building, Ahmedabad. The following firms participated in the meeting:-

Sr.No. Vendors Name of Representatives
1 CASAD Consultant Pvt. Ltd. Ms. Niyati Patel
2 CASAD Consultant Pvt. Ltd. Mr. Sohail Dhanpurwala
3 S.P Bagwe Consultant Pvt. Ltd. Mr. Pradeep Pal
4 EPICONS Consultant Pvt. Ltd. Mr. Parth Patel

2. Participants from Reserve Bank of India, Ahmedabad: –

Sr.No. Name of RBI Officials Designation
1 Ms. Supriya Pai DGM
2 Mr. Sharad Kumar AGM
3 Mr. Girish Shah Manager (Civil)
4 Mr. Sushil Mulukh Assistant Manager (Civil)
5 Ms. Harshita Tripathi Junior Engineer (Civil)
6 Mr. Parth Ghori Assistant

3. Following queries/doubts were raised and clarified in the meeting: –

Sr. No. Queries raised by the Participants RBI’s Clarification
1. In which mode EMD to be submitted and how much EMD required to be submitted by tenderer? The participants were advised to refer Clause 9 of section III of Tender Document.
2. Whether Part I, Part II and EMD amount to be submitted in single envelope or in separate cover? The participants were advised to submit three envelopes duly sealed with clearly superscribing content of envelope, name of work and name of participant.

  1. Part I
  2. Part II (Price Bid)
  3. EMD Amount

Participants were also advised to not to mention tendered amount/quoted amount and EMD amount in Part I of the Tender Document or on envelope.

3. Whether Bank’s Class III quarters drawings available with Reserve Bank of India, Ahmedabad? List of SBSQ Class III Structural drawings are available with Reserve Bank of India, Ahmedabad is as under:

  1. Ground and first floor lintel level details
  2. Details of foundation
  3. Ground floor slab and beam details
  4. Ground floor slab level (part) details
  5. R.C.C details of 1st floor slab
  6. Second floor slab level (part) details
  7. R.C.C details of terrace
  8. Detail of lintel
  9. Second floor lintel level
  10. Section of 230 mm and 350 mm thick wall.
4. Whether Bank’s Class IV quarters drawings available with Reserve Bank of India, Ahmedabad? List of SBSQ Class IV Structural drawings are available with Reserve Bank of India, Ahmedabad is as under:

  1. Layout of columns and details of column footings
  2. Details of column footing
  3. Details of lintel and staircase
  4. R.C.C details of slabs (typical floor)
  5. Terrace beam details
  6. Terrace level plan
  7. Details of beams at parking slab level
  8. Layout for parking level
  9. Beam layout and expansion joint details
  10. Terrace beam details
  11. Details of beams (typical floor)
  12. Terrace level beam layout
  13. Details of beam common to two buildings.
5. Whether Bank’s Class IV and Class III Architectural drawings available with Reserve Bank of India, Ahmedabad? List of Bank’s Class IV and Class III Architectural drawings are available with Reserve Bank of India, Ahmedabad is as under:

  1. Typical Class IV Floor plan and elevation detail drawings.
  2. Terrace detail- floor plans
  3. Side elevation and end elevation drawings
  4. Class III floor plans and elevation drawings.
6. Whether any MS structure used in Bank’s Class III and Class IV staff quarters? The participants were informed that these quarters do not have any MS structure.
7. Whether it is compulsory to comply with all pre-qualification criteria requirement? Yes, all participants were informed that it is must to comply with all pre-qualification criteria mentioned in tender document.

4. The participating bidders were advised to submit their bids in physical mode well before the last date of submission of tender (i.e. June 24, 2021 at 03.00 PM).

5. This document (minutes of the Pre-Bid Meeting) shall form a part of the tender and a duly signed & stamped copy of the same must be attached with Part-I of the tender. Any bid received without a duly signed and stamped copy of this document is liable to be rejected.

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Reserve Bank of India – Press Releases

Press Releases

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I. SUMMARY – PURCHASE RESULTS

Aggregate Amount (Face value) notified by RBI ₹40,000 crore
Total amount offered (Face value) by participants in G-secs ₹1,24,526 crore
Total amount offered (Face value) by participants in SDLs ₹12,303 crore
Aggregate amount offered (Face value) by participants ₹1,36,829 crore
Total amount accepted (Face value) by RBI in G-secs ₹34,575 crore
Total amount accepted (Face value) by RBI in SDLs ₹5,425 crore
Aggregate amount accepted (Face value) by RBI ₹40,000 crore

II. DETAILS OF GOVERNMENT SECURITIES (G-SECs) PURCHASE

Security 6.97% GS 2026 6.79% GS 2027 7.17% GS 2028 7.59% GS 2029 5.85% GS 2030 6.64% GS 2035
No. of offers received 105 101 136 82 300 225
Total amount (face value) offered (₹ in crore) 18,839 12,367 23,992 15,038 29,801 24,489
No. of offers accepted Nil Nil 4 Nil 274 61
Total offer amount (face value) accepted by RBI (₹ in crore) NA NA 1,914 NA 26,779 5,882
Cut off yield (%) NA NA 6.2686 NA 5.9910 6.6544
Cut off price (₹) NA NA 104.78 NA 98.99 99.87
Weighted average yield (%) NA NA 6.2722 NA 6.0079 6.6621
Weighted average price (₹) NA NA 104.76 NA 98.87 99.80
Partial allotment % of competitive offers at cut off price NA NA 83.50 NA Nil Nil

III. DETAILS OF STATE DEVELOPMENT LOANS (SDLs) PURCHASE

Security 7.42% ANDHRA SDL 2031 7.17% BIHAR SDL 2030 8.26% GUJARAT SDL 2031 7.17% GUJARAT SDL 2030
No. of offers received 4 1 NIL 7
Total amount (face value) offered (₹ in crore) 62 185 NA 264
No. of offers accepted 4 NIL NA 1
Total amount (face value) accepted by RBI (₹ in crore) 62 NIL NA 60
Cut off yield (%) 6.8006 NA NA 6.7424
Cut off price (₹) 104.50 NA NA 102.74
Weighted average yield (%) 6.8059 NA NA 6.7424
Weighted average price (₹) 104.46 NA NA 102.74
Partial allotment % of competitive offers at cut off price NIL NA NA NIL

Security 6.59% HARYANA SDL 2030 7.16% KARNATAKA SDL 2030 8.22% KARNATAKA SDL 2031 7.03% MADHYA PRADESH SDL 2031
No. of offers received 10 10 4 20
Total amount (face value) offered (₹ in crore) 379 379 122 1,751
No. of offers accepted NIL 2 2 15
Total amount (face value) accepted by RBI (₹ in crore) NIL 160 95 1,406
Cut off yield (%) NIL 6.8109 6.7519 6.7502
Cut off price (₹) NA 102.23 110.25 101.95
Weighted average yield (%) NA 6.8247 6.7721 6.7939
Weighted average price (₹) NA 102.14 110.10 101.64
Partial allotment % of competitive offers at cut off price NA NIL NIL NIL

Security 8.15% MAHARASHTRA SDL 2030 6.54% MAHARASHTRA SDL 2030 8.45% PUNJAB SDL 2031 8.56% PUNJAB SDL 2030
No. of offers received 3 5 2 1
Total amount (face value) offered (₹ in crore) 35 720 30 25
No. of offers accepted 3 NIL 2 NIL
Total amount (face value) accepted by RBI (₹ in crore) 35 NIL 30 NIL
Cut off yield (%) 6.7475 NA 6.7969 NA
Cut off price (₹) 109.20 NA 111.60 NA
Weighted average yield (%) 6.7778 NA 6.8102 NA
Weighted average price (₹) 108.99 NA 111.50 NA
Partial allotment % of competitive offers at cut off price NIL NA NIL NA

Security 7.15% RAJASTHAN SDL 2031 7.05% RAJASTHAN SDL 2031 6.33% TAMILNADU SDL 2030 6.53% TAMILNADU SDL 2031
No. of offers received NIL 8 22 39
Total amount (face value) offered (₹ in crore) NA 569 2,919 1,867
No. of offers accepted NA 7 1 2
Total amount (face value) accepted by RBI (₹ in crore) NA 559 600 219
Cut off yield (%) NA 6.7502 6.8111 6.7376
Cut off price (₹) NA 102.09 96.77 98.55
Weighted average yield (%) NA 6.8165 6.8111 6.7580
Weighted average price (₹) NA 101.62 96.77 98.41
Partial allotment % of competitive offers at cut off price NA NIL NIL NIL

Security 7.17% UTTAR PRADESH SDL 2031 7.16% UTTAR PRADESH SDL 2031 7.10% WEST BENGAL SDL 2030 7.23% WEST BENGAL SDL 2030
No. of offers received 13 3 9 NIL
Total amount (face value) offered (₹ in crore) 1,918 495 583 NIL
No. of offers accepted 10 3 NIL NIL
Total amount (face value) accepted by RBI (₹ in crore) 1,704 495 NIL NIL
Cut off yield (%) 6.7494 6.7889 NA NA
Cut off price (₹) 102.95 102.60 NA NA
Weighted average yield (%) 6.7814 6.7986 NA NA
Weighted average price (₹) 102.72 102.53 NA NA
Partial allotment % of competitive offers at cut off price NIL NIL NA NA

Ajit Prasad
Director   

Press Release: 2021-2022/382

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RBI pays higher-than-expected price to buy 10-year G-Sec

Banking & Finance

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The Reserve Bank of India paid about 38 paise more to purchase the 10-year Government Security (G-Sec) under the third tranche of the G-Sec Acquisition Programme 1.0 in a bid to keep bond yields on a tight leash.

The central bank bought this G-Sec (coupon rate: 5.85 per cent) at ₹98.99 (yield: 5.991 per cent) against the previous close of ₹98.6075 (6.045 per cent).

The move to buy the aforementioned security at a higher price had the desired effect as it closed about 18 paise higher at ₹98.79 than the previous close, with the yield declining about 3 basis points to 6.0192 per cent.

Bond yield and price are inversely related and move in opposite directions.

Under G-SAP 1.0, the central has committed upfront to a specific amount (₹1-lakh crore in the first quarter of FY22) of open market purchases of G-Secs to enable a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.

Of the six G-Secs and State development loans of 12 States the central bank intended to buy aggregating ₹40,000 crore, it invested about 67 per cent of the amount (or ₹26,779 crore) in buying the 10-year paper.

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, said: “the 10-year G-Sec is the most widely-traded security. It is the signalling rate. Most of the borrowing is in the belly (10-year to 15-year) of the curve.

“In the last two days, prices had fallen based on the upcoming Fed event and profit booking. So probably it was bought 38 paise up.”

He underscored that most of the float is with RBI in 10-year benchmark paper.

“Probably RBI gave an exit to investors holding this paper so that those they can participate in auctions going ahead and support the borrowing,” Irani said.

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Reserve Bank of India – Press Releases

Press Releases

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The following State Governments have offered to sell securities by way of auction, for an aggregate amount of ₹ 19,100 Cr. (Face Value).

Sr. No. State Amount to be raised
(₹ Cr)		 Additional Borrowing (Greenshoe) Option
(₹ Cr)		 Tenure
(Yrs)		 Type of Auction
1. Andhra Pradesh 1000 – 15 Yield
1000 – 16 Yield
2. Goa 100 – 10 Yield
3. Haryana 2000 – 16 Yield
4. Kerala 1000 – 15 Yield
500 – 17 Yield
1000 – 20 Yield
5. Maharashtra 1000 500 10 Yield
1000 – 11 Yield
6. Rajasthan 1000 – 11 Yield
1000 – 15 Yield
7. Tamil Nadu 1000 – 10 Yield
1000 – Re-issue of 6.96% Tamil Nadu SDL 2056 issued on May 19, 2021 Price
8. Telangana 1000 – 20 Yield
9. Uttar Pradesh 2500 – 10 Yield
10. West Bengal 3000 – 15 Yield
  Total 19100      

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 22, 2021 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 22, 2021 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.

In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.

For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at same/different rates of yield or prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield /minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹10,000.00 and multiples of ₹10,000.00 thereafter.

The results of the auction will be announced on June 22, 2021 (Tuesday) and payment by successful bidders will be made during banking hours on June 23, 2021 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. For the new securities, interest will be paid half yearly on December 23 and June 23 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Ajit Prasad
Director   

Press Release: 2021-2022/381

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CCI approves combination involving Magma HDI General Insurance

Banking & Finance

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The Competition Commission of India (CCI) has approved a combination transaction involving India Advantage Fund S4 I (IAF) and Dynamic India Fund S4 US I (DIF) together, picking less than 25 per cent and NHPEA Trisul Holding B.V (NTH) picking up less than 10 per cent combined interest in Magma HDI General Insurance, a non life insurance company.

The IAF/DIF transaction and the NTH transaction are collectively referred to as the “proposed combination”.

NTH is an investment holding company that ultimately belongs to a fund managed or controlled by an affiliate of Morgan Stanley.

The CCI has concluded that the proposed combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India irrespective of the manner in which the relevant markets are defined. The relevant market has been broadly defined as “the market for general insurance in India”.

Magma HDI was established in 2012 and had 133 branches as of December 30, 2020.

This General insurer offers 62 products across various categories including motor, health, personal accident, home, fire, engineering to secure all major risks in general insurance sphere.

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How savings were impacted by Covid second wave

Banking & Finance

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Faced with the surge of Covid-19 infections in recent months combined with lockdowns that led to job losses and drop in income, many households are understood to have started using their accumulated savings to fund expenditure.

This, in turn, has led to concerns over a decline in the savings rate that could hamper further recovery.

According to the Reserve Bank of India’s monthly bulletin for March, household net financial savings rose to 21 per cent of GDP in the first quarter of 2020-21 and fell to 10.4 per cent in the second quarter. A report by Motilal Oswal in April had said household net financial savings had likely fallen to 8.4 per cent of GDP in the third quarter last fiscal.

Anecdotal data as well as the slowdown in bank deposits indicate that household savings have been impacted by the second surge of Covid-19 infections.

Bank deposits

Deposits of commercial scheduled banks grew 9.7 per cent on an annual basis to ₹1,51,66,808.18 crore for the fortnight ended May 21, 2021 as against a 9.9 per cent growth in the fortnight ended May 7, 2021.

“Growth in deposits with scheduled commercial banks (a proxy for household saving, having about 50 per cent share in households’ overall savings portfolio), has declined starting April 2021. Last year, in contrast, deposit growth had moved up. This could be indicative of pressure on incomes and a simultaneous rise in medical expenditure given the heightened ferocity of the second wave,” said a recent report by Crisil.

People also seem to be withdrawing funds from retirement savings. By May 31, 2021, the EPFO had settled over 76.31 lakh claims under the Covid-19 advance scheme amounting to over ₹18,698.15 crore. The government has now allowed a second round of such withdrawals from the Employees’ Provident Fund.

Gold auction

Gold loan NBFCs are auctioning more gold in recent months indicating higher distress amongst borrowers. For instance, Manappuram Finance said it auctioned gold worth ₹404 crore in the fourth quarter of 2020-21 compared to ₹8 crore in the nine month period ended December 2020.

Sale of life insurance policies has also declined in recent months but there are expectations that it may revive in coming months.

“Equity markets have been performing well. It is expected that products such as mutual funds and ULIPs will continue to do well this fiscal as bank deposits have lost their sheen,” said an executive with a private insurer.

 

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Reserve Bank of India – Press Releases

Press Releases

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Reserve Bank of India, in the public interest, had issued directions to Padmashri Dr. Vitthalrao Vikhe Patil Co-operative Bank Ltd., Nashik, Maharashtra in exercise of powers vested in it under sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949 (AACS) from the close of business on May 19, 2018. These directions were modified from time to time, the validity of which was last extended upto June 17, 2021. These directions shall continue to apply to the bank for a further period of three months from June 18, 2021 to September 17, 2021, subject to review. The Directions stipulate certain restrictions and / or ceiling on withdrawal / acceptance of deposits. A copy of Directions is displayed at the bank’s premises for interested members of public to peruse. Reserve Bank of India may consider modifications of the Directions depending upon the circumstances. The issue of Directions should not per se be construed as cancellation of banking license by the Reserve Bank of India. The bank will continue to undertake banking business with restrictions till its financial position improves.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/380

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