Case Brief
RBI issued fresh directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 against Sarjeraodada Naik Shirala Sahakari Bank Ltd., Shirala, Dist. Sangli, Maharashtra. The bank's administrator may not, without prior RBI approval, grant or renew loans and advances, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as permitted in the direction. The release also states that a depositor may withdraw only up to ₹500 in total across all accounts, subject to the conditions in the RBI directions. RBI clarified that the order is not a cancellation of banking licence and that the bank may continue to undertake banking business with restrictions while its financial position improves. The directions were effective from the close of business on February 03, 2021 and were set to remain in force for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location