Case Brief
The Reserve Bank of India issued Directions to Navodaya Urban Cooperative Bank Ltd., Nagpur, District Nagpur, Maharashtra under Section 35A of the Banking Regulation Act, 1949 read with Section 56, effective from close of business on December 15, 2016 for six months. The order bars the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets without prior RBI approval, except as specifically notified. It also limits depositor withdrawals to ₹1,000 per account on one occasion during the restriction period. RBI clarified that this is not a cancellation of banking licence and that the bank may continue banking business only with restrictions, subject to possible modification depending on circumstances.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location