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RBI norms about Directors and Ex Directors of Cooperative Banks
Can you explain the RBI norms about Directors and Ex Directors of Cooperative Banks not allowed to settle NPAs through OTS?
As you can read from the RBI notification here, at Clause c of Section (A)1, Loans availed of or guaranteed by ex-Directors of respective Urban Co-operative Banks are NOT covered by the OTS scheme. Thus, if you are an ex director of a cooperative bank and you have an NPA account, your only option is to repay all dues. In order to ease your burden, you may see if your bank has a restructuring option for loans. Generally banks have the option, but it differs from bank to bank. Under this, the bank may agree to extend your time to repay them. However, if such an option is not available, you have no choice but to repay your dues within the time period as stipulated by the Bank.Consult Now
Under Section 20, banks are not allowed to give loans to its directors. Even if they have done so, Under Section 20A, a Bank is not allowed to remit any loan or part of any loan, except with the prior approval of the Reserve Bank. Any such remission shall be void and of no effect.Consult Now
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