RBI places Rupee Co-operative Bank, Maharashtra under Directions

Case Brief

The Reserve Bank of India placed Rupee Co-operative Bank Ltd., Dist. Pune, Maharashtra, under Directions issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56. The bank’s depositors could withdraw no more than Rs 1,000 from each savings/current/other deposit account, subject to conditions in the Directions. The bank was also restricted from granting or renewing loans and advances, making investments, incurring liabilities including fresh borrowings and acceptance of deposits, disbursing payments, entering compromises or arrangements, and selling or otherwise disposing of assets without prior written RBI approval, except as specifically notified. RBI stated that the action was not a cancellation of banking licence and that the bank would continue banking operations under restrictions until its financial position improved.