Case Brief
The Reserve Bank of India issued directions to The Bhimavaram Co-operative Urban Bank Ltd., Bhimavaram, Andhra Pradesh, under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. The order, effective from the close of business on March 28, 2019, restricted the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or otherwise disposing of assets without prior RBI approval. It allowed limited withdrawals of up to ₹1,000 per depositor per account, permitted renewal of existing term deposits on maturity, and allowed certain expenditure and investments in Government/SLR-approved securities. RBI stated the directions would be in force for six months, subject to review, and clarified that the directions should not be construed as cancellation of the banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location