RBI on Saturday had issued directions to MUCB not to allow customers to withdraw over Rs 1,000, from their savings, current and other deposit accounts. The order was valid till December 2015.
The bank’s managing committee challenged the order in the High Court under Section 35A of the Banking Regulation Act 1949.
Advocate A N S Nadkarni along with Parag Rao argued that the bank had posted a net profit of Rs 1.95 crore for the last financial year and that the bank has liquidity to the extent of Rs 211 crore. The bank management also said that the direction would have put customers to inconvenience, as the bank has 24 branches across Goa and large number of account holders.
The court the passed an ex-parte interim relief order and stayed the restriction imposed on MUCB.
MUCB acting chairman Gurudas Natekar said the RBI directions were harsh, arbitrary and uncalled for.
Besides withdrawal restriction, RBI had also directed the bank not to grant/renew any loans and advances, make any investments, incur any liability, including fresh deposits, disburse/agree to disburse any payment whether in discharge of liabilities/obligations or otherwise, enter into any compromise/agreement and sell, transfer or dispose of any properties or assets without prior approval from RBI.
