Case Brief
The Reserve Bank of India issued Directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 against The Youth Development Co-operative Bank Ltd., Kolhapur, Maharashtra. Under the order, depositors may withdraw only up to ₹5,000 from each savings, current, or other deposit account, subject to conditions in the directions. The bank is also prohibited, without prior RBI approval, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments in discharge of liabilities and obligations, entering into compromises or arrangements, and selling or disposing of its assets except as permitted. The directions are in force for six months from the close of business on January 05, 2019, and RBI 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