RBI imposes restrictions on banking operations of APCB

AHMEDABAD: The Reserve Bank of India (RBI) on Tuesday imposed restrictions on certain banking operations of the city-based Ahmedabad People's Co-operative Bank (APCB), following high Non-Performing Assests (NPAs).

According to the state Registrar of Co-operative Society (ROCS), APCB has been served notice under Section 36-A of the Banking Regulation Act by the RBI, restricting the bank to extend its area of operations.

The co-operative bank has eight branches including one in Dhandhuka district, with total deposits of Rs 89 crore, 66,000 depositors base, advances of Rs 52 crore, and NPAs of 74 per cent as on 31st March 2008, senior ROCS official said.

"The NPAs of APCB have come down since March 2008, but the bank still has to improve its Capital Adequacy Ratio (CAR). So it has been adviced by the apex bank to submit a detailed action plan," he added.

As per the RBI stipulation, Co-operative banks have to maintain a minimum CAR of nine per cent, state officials said.

After being served notice under Section 36-A, the bank cannot declare or disburse dividend, and also cannot shift its premises to a new location from the existing one, they added.

However, the bank shall continue with its regular banking operations until there are further orders from the RBI, thereby the investors will not be affected at this point of time, state officials said.