Case Brief
RBI issued directions to Mahamedha Urban Co-operative Bank Ltd., Ghaziabad under Section 35A of the Banking Regulation Act, 1949 read with Section 56 in the public interest. The order restricts the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, making payments, entering compromises or arrangements, and disposing of assets except as specifically allowed. Depositor withdrawals were capped at ₹1,000 per account, while renewal of existing term deposits on maturity and certain permitted expenditure were allowed; investment in Government/SLR securities was also allowed. RBI stated the bank would continue to undertake banking business with restrictions, and that the directions would remain in force for six months from the close of business on July 29, 2016, subject to review and possible modification.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location