Case Brief
The Reserve Bank of India issued directions under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56 against The Kokan Prant Sahakari Bank Ltd., Mumbai, Maharashtra. Effective from the close of business on August 7, 2012, the bank was restrained 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, except as specifically permitted in the RBI directions. Depositors were permitted to withdraw up to Rs 1,000 from savings, current, or other deposit accounts, subject to the stated conditions. RBI stated that the directions were not a cancellation of banking licence and that the bank would continue to operate with restrictions pending improvement in its financial position.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location