Directions under Section 35 A read with section 56 of the Banking Regulation Act,1949 (As Applicable to Co-operative Societies) – Harihareshwar Sahakari Bank Limited, Wai, Satara

Case Brief

RBI issued Directions to Harihareshwar Sahakari Bank Limited, Wai, Satara under Section 35A read with Section 56 of the Banking Regulation Act, 1949 (as applicable to co-operative societies), effective from the close of business on May 31, 2022. The bank was restrained from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets except as permitted. Due to the bank's liquidity position, withdrawals from depositor accounts were also capped/արգելed subject to conditions, while RBI noted that 99.59% of depositors were covered by DICGC insurance. RBI clarified the order was not a cancellation of licence and would remain in force for six months, subject to review.