Case Brief
RBI issued directions under Section 35A of the Banking Regulation Act, 1949 (AACS) read with Section 56 to Bhuj Mercantile Co-operative Bank Ltd., Ahmedabad, effective from the close of business on 02 April 2012. The directions restricted the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowing and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or transferring assets, unless specifically permitted by RBI. The bank was allowed withdrawals only up to ₹10,000 per account from savings, current, or other deposit accounts. RBI clarified that these directions should not be construed as cancellation of the banking licence, and that the bank would continue to conduct banking business under restrictions for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location