Case Brief
RBI issued directions to Karnala Nagari Sahakari Bank Ltd., Panvel, Raigad (Maharashtra) under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on June 15, 2020. The directions prohibit the bank’s Administrator from, without prior RBI approval in writing, granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing or agreeing to disburse payments, entering into compromises or arrangements, and selling or otherwise disposing of assets, except as specifically notified. Depositors are permitted to withdraw only up to ₹500 in total across savings, current, or other accounts. RBI clarified that the issuance of these directions should not be construed as cancellation of the bank’s licence and stated that the bank will continue banking business with restrictions until its financial position improves, with the directions remaining in force for six months subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location