Supreme Court issues notice to RBI over lifting of loan restrictions imposed on Co-Operative Bank

Supreme Court

The Supreme Court has sought response from the Reserve Bank of India on a petition challenging the Kerala High Court order, which had lifted the loan restrictions imposed by RBI on Thiruvalla East Co-Operative Bank Ltd.

The notice was received by Attorney General R. Venkataramani, who appeared for RBI before the Division Bench of Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia on Friday.

The AG contended that RBI had conducted an inspection at the headquarters and various branches of the cooperative bank before issuing a prohibitory order.

As per the Central Bank, the inspection report revealed some deficiencies in banking practice, including some loan advance schemes that were susceptible to foul play.

The AG further said that RBI imposed restrictions on the cooperative bank based on this inspection report.

Earlier, a Division Bench of the Kerala High Court had upheld the order of a Single-Judge Bench that lifted the restriction placed on the Co-Operative Bank by RBI to stop further sanction/disbursal of loans and advances as the bank was not given an opportunity of hearing.

The High Court mentioned the Banking Regulation Act, 1949, stating that RBI could not completely prohibit the transactions of the bank under Sections 35 and 36 unless there were exceptional circumstances to do so.

The High Court Division Bench ruled that factual appreciation was required before passing orders of prohibition and that an opportunity of hearing must be given to the banking company before passing such an order.

It said in normal circumstances, RBI could not pass a prohibitory order under Section 36(1) without giving the banking company an opportunity of being heard. The High Court noted that the deviation was exceptional and that too, to protect the public interest.

It said if RBI intended to pass such an order, it must demonstrate with reasons in the order itself how the larger public interest would adversely be affected if prohibition order was not imposed.

The post Supreme Court issues notice to RBI over lifting of loan restrictions imposed on Co-Operative Bank appeared first on India Legal.



from India Legal https://ift.tt/PV69UyS

Popular posts from this blog

What Is Solana: A Description, Use Cases, Prospects

Most traders focus on well-known cryptos only, like BTC or Ether. However, today, there are many other blockchain networks that are worth considering. And some of them, for example, Solana, even have ambitions to force current leaders out. Thus, we offer you to get acquainted with this coin without a delay. Solana (SOL) is one of the blockchain platforms created for performing transactions at a high speed and at a cheap price similar to other networks of this kind. Likewise, it can be utilized for trading, paying for diversified goods and services, performing smart contracts, creating NFTs, accessing decentralized financial opportunities, for example, loans, etc. Yet, when one asks the question “ What is Solana? ”, one usually wants to find out if it is worth buying, in the first place. Thus, we must note right away that this network outcompetes other popular platforms both in terms of speed and in terms of costs. To be more precise, it can process 13 deals per second, while Bitcoin ...
Read more

FX Options Trading: Best Online Brokers

Never used options on Forex? Looks like you missed lots of profitable deals. Be sure to learn more about this method and decide whether it suits you. Start by reading our short review for beginners. In the end, we will give you a list of companies that offer the best terms for such trades. Let us start with a short theory about this trading method. In practice, an option is a contract that allows a trader to buy or sell a certain currency at a chosen price and on a chosen date.  FX options trading  is based on forecasts. For example, if a potential buyer believes that the price of a certain currency will grow in the future, he can reserve the right to buy it at a lower price. For this opportunity, one must pay a commission (or a premium). Another crucial point is that executing such deals is optional. When the date agreed comes, one can decide whether it is worth buying or selling the currency chosen. Also Read: Interactive Brokers Fees: An Overview for Potential Users And...
Read more

Crypto Trading Bot: Should You Try It and Which One to Choose

Are you searching for an instrument that will help you trade crypto at minimum risk and time expense, but with maximum earnings? Then, try a trading robot. Find the basic information about this tool and the list of the most reliable and effective products offered by the market. So, such a robot is a program that executes trades involving crypto in an automated mode based on the market situation and parameters set by its user. It can make use of diversified algorithms, patterns, signals provided by other traders, etc. Here are the major benefits such software can offer:   Time economy. A day trader does not have to spend a whole day monitoring the market.   No human mistakes. Such a program operates in strict accordance with the parameters and algorithm set. By contrast with traders, it cannot make mistakes due to fatigue or external distractions.   Fast reaction. Compared to humans, it takes a bot less time to analyze the current situation on the mark...
Read more