Case Brief
The Reserve Bank of India issued directions to Sri Bharathi Co-operative Urban Bank Ltd., Hyderabad, under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. Effective from the close of business on January 02, 2019, the bank was restricted from granting or renewing loans and advances, making payments, incurring liabilities, accepting fresh deposits, and disposing of assets except as specifically permitted. Deposit withdrawals were capped at ₹1,000 per account, subject to set-off where the depositor also owed money to the bank as borrower or surety. The bank was allowed to renew existing term deposits on maturity, incur permitted expenditure, and invest in Government/SLR-approved securities. RBI said the directions would remain in force for six months and may be modified depending on circumstances, while clarifying that the action should not be construed as cancellation of the banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location