Case Brief
The Reserve Bank of India issued Directions against The Needs of Life Co-operative Bank Ltd., Mumbai, Maharashtra, under Section 35A of the Banking Regulation Act, 1949 read with Section 56. The order capped depositor withdrawals at ₹1,000 per savings/current/other deposit account, subject to the stated conditions, and barred the bank from taking several core actions without prior written RBI approval: granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and selling/transferring/disposal of assets except as notified in the directions. The RBI clarified that the issuance of the directions should not be construed as cancellation of the banking licence, and that the bank would continue banking business with restrictions until its financial position improved. The directions were to remain in force for six months from the close of business on October 29, 2018, with possible modification by the RBI depending on circumstances.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location