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 Brahmawart Commercial Co-operative Bank Ltd., Kanpur. Effective from the close of business on July 7, 2015, the bank could not grant or renew loans and advances, make investments, incur liabilities including fresh borrowings and acceptance of fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets without RBI approval, except to the limited extent specified in the directions. Depositors were permitted to withdraw only up to ₹1,000 from each savings/current/other deposit account, subject to adjustment against any liabilities to the bank. Existing term deposits could be renewed on maturity in the same name and capacity, permitted expenditure could be made, and investment in Government/SLR-approved securities was allowed. The RBI stated that the bank would continue to undertake banking business with restrictions and that the directions would remain in force for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank