Case Brief
RBI issued directions to Babaji Date Mahila Sahakari Bank Ltd., Yavatmal, Maharashtra, under Section 35A read with Section 56 of the Banking Regulation Act, 1949. Effective from the close of business on November 8, 2021, the bank was restrained from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, making payments, and entering into compromises or asset disposals except as specified in the RBI direction. The bank’s present liquidity position is cited as the basis for the action. RBI clarified that the directions do not amount to cancellation of the banking licence, that the bank may continue banking business with restrictions, and that the directions will remain in force for six months from the effective date, subject to review. Limited withdrawal of up to ₹5,000 from a depositor’s total account balance was permitted, along with loan set-off under conditions in the directive.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location