Case Brief
RBI issued Directions under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56 against Sanmitra Sahakari Bank Maryadit, Mumbai, Maharashtra. Effective from the close of business on June 14, 2016, the bank was prohibited from granting or renewing loans and advances, making investments, incurring liabilities including borrowing funds and accepting fresh deposits, disbursing payments, entering into compromises/arrangements, or selling/transferring/disposal of assets except as allowed in the Directions. Depositors were permitted to withdraw only up to ₹1,000 from each savings/current/other deposit account, subject to stipulated conditions. RBI clarified that these Directions do not amount to cancellation of the bank’s licence and that the bank would continue banking operations with restrictions until its financial position improves.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location