Case Brief
RBI issued directions to Gokul Co-operative Urban Bank Ltd., Secunderabad under Section 35A of the Banking Regulation Act, 1949 (read with Section 56), effective from the close of business on April 04, 2016. The bank was restricted from granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering compromises or arrangements, and disposing of assets except as specifically permitted. Depositor withdrawals were capped at ₹1,000 per account, with any borrower/surety liability to be adjusted first, while existing term deposits could be renewed on maturity and investments in Government/SLR-approved securities were allowed. RBI said the directions would remain in force for six months, subject to review, and explicitly noted that the action should not be construed as cancellation of the banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location