Case Brief
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Sri Mallikarjuna Pattana Sahakari Bank Niyamita, Maski, Karnataka. Effective from the close of business on July 18, 2022, the bank cannot, without prior written RBI approval, grant or renew loans and advances, make investments, incur liabilities including borrowings and fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as permitted in the cited direction. RBI also restricted withdrawals from all depositor accounts, while allowing set-off of loans against deposits under specified conditions. The press release clarifies that this is not a cancellation of banking licence and that the bank may continue to conduct banking business with restrictions until its financial position improves; the directions are valid for six months and subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location