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

Case Brief

RBI issued directions to Ramgarhia Co-operative Bank Ltd., New Delhi under Section 35A read with Section 56 of the Banking Regulation Act, 1949. Effective from the close of business on July 08, 2022, the bank was restrained from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, making payments, entering into compromises or arrangements, and selling or disposing of assets without prior written approval. Depositors could withdraw up to ₹50,000 from the total balance across their savings bank, current, or other accounts, subject to the conditions in the direction. RBI stated that the order should not be construed as cancellation of the banking licence and that the bank would continue banking business under restrictions until its financial position improved. The directions were to remain in force for six months from the close of business on July 08, 2022, subject to review.