Case Brief
The Reserve Bank of India issued fresh directions under Section 35A of the Banking Regulation Act, 1949 (read with Section 56 for co-operative societies) against Gomti Nagariya Sahkari Bank Ltd., Jaunpur (Uttar Pradesh). Effective from the close of business on July 10, 2017, the bank was restricted 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 disposing of assets except as specifically permitted. Depositor withdrawals were limited to ₹1,000 per savings/current/other deposit account, subject to adjustment against any borrowings or surety liabilities, and existing term deposits could be renewed on maturity. The RBI said the bank would continue to undertake banking business with restrictions, and the directions would remain in force for six months subject to review; it also 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