Case Brief
The Reserve Bank of India issued Directions to Karad Janata Sahakari Bank Ltd., Karad, Dist: Satara, Maharashtra, under Section 35A of the Banking Regulation Act, 1949 read with Section 56. Effective from the close of business on November 09, 2017, the bank’s depositors were permitted to withdraw only up to ₹1,000 per account, subject to the RBI’s conditions. The bank was also 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/arrangements, or disposing of assets except as notified in the RBI directions. RBI stated that this should not be construed as cancellation of the banking licence and that the bank would continue banking business with restrictions until its financial position improves.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location