Case Brief
The Reserve Bank of India issued directions to Lokseva Sahakari Bank Ltd., Dist. Pune, Maharashtra, under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. The directions became effective close of business on May 20, 2014. They restricted depositor withdrawals to Rs 1,000 per account and prohibited the bank from granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or disposing of assets except in accordance with the RBI's specified directions or with prior written approval. RBI also clarified that the directions were not to be construed as cancellation of the bank's licence and that the bank would continue operating with restrictions until its financial position improved.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location