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

Case Brief

RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Uravakonda Co-operative Town Bank Ltd., Uravakonda, Anantpur District. From the close of business on February 24, 2023, the bank was restricted from granting or renewing loans and advances, making investments, incurring liabilities including borrowing and acceptance of fresh deposits, disbursing payments, entering compromises or arrangements, and selling or disposing of assets without prior RBI approval. Depositors could withdraw only up to ₹5,000 from the total balance across specified accounts, subject to conditions in the direction. RBI clarified that the order is not a cancellation of banking licence and that the bank may continue banking business under restrictions for six months, subject to review.