Case Brief
RBI issued directions to United India Co-operative Bank Ltd., Nagina, Bijnor (Uttar Pradesh) in public interest under Section 35A of the Banking Regulation Act, 1949 read with Section 56. Effective from the close of business on July 15, 2015, the bank could not, without prior written approval of RBI, grant or renew loans and advances, make investments, incur liabilities including borrowing or acceptance of fresh deposits, disburse payments, enter compromises or arrangements, or dispose of assets except as permitted in the directions. Depositors were allowed to withdraw only up to ₹1,000 from each savings, current, or other deposit account, subject to adjustment against any borrower or surety liability. The bank could renew existing term deposits on maturity in the same name and capacity, incur permitted expenditure, and invest in Government/SLR-approved securities. RBI clarified that the directions were not to be construed as cancellation of the banking licence, and stated they would continue for six months from the effective date, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location