Case Brief
The Reserve Bank of India issued directions to Maratha Sahakari Bank Ltd., Mumbai, Maharashtra under Section 35A of the Banking Regulation Act, 1949 read with Section 56, effective from the close of business on August 31, 2016. The bank was prohibited, without prior written approval from RBI, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or disposing of assets, except as permitted in the RBI directions. RBI also restricted withdrawals, allowing only up to Rs 1,000 from the total balance in each savings, current or other deposit account, subject to conditions. RBI clarified that the order was not a cancellation of the banking licence and that the bank would continue to conduct banking business with restrictions until its financial position improved.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location