Directions under Section 35 A read with section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) – Malkapur Urban Co-operative Bank Ltd., Buldhana

Case Brief

RBI issued directions to Malkapur Urban Co-operative Bank Ltd., Buldhana under Section 35A of the Banking Regulation Act, 1949 read with Section 56. The order, effective from the close of business on November 24, 2021, restricts the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or otherwise disposing of assets without prior written approval of RBI. Customer withdrawals were also limited to ₹10,000 per depositor across savings, current, or other accounts, subject to the stated conditions. RBI said the directions are not a cancellation of banking licence and will remain in force for six months, subject to review and possible modification.