Case Brief
The Reserve Bank of India issued directions to Sri Bharathi Co-operative Urban Bank Ltd., Hyderabad under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. Effective from the close of business on August 29, 2016, the bank was barred from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and disposing of assets except as specifically allowed. Depositors could withdraw up to ₹1,000 from each savings/current/other deposit account, subject to adjustment against any liability to the bank; existing term deposits could be renewed on maturity; permitted expenditure and investment in Government/SLR approved securities were allowed. RBI said the directions would remain in force for six months and are subject to review, and clarified that the order should not be construed as cancellation of the banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location