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

Case Brief

RBI issued directions to Sangli Sahakari Bank Ltd., Mumbai under Section 35A of the Banking Regulation Act, 1949 read with Section 56 applicable to co-operative societies. The directions took effect from the close of business on July 08, 2022 and restricted the bank from, without prior written approval of RBI, 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 except as notified. A depositor could withdraw up to ₹45,000 in total across savings, current or other accounts, subject to the stated conditions. RBI clarified that the order was not a cancellation of the banking licence and said the bank would continue operations within these restrictions for six months, subject to review.