Directions under Section 35A read with section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) – The Konark Urban Co-operative Bank Ltd., Ulhasnagar

Case Brief

RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Konark Urban Co-operative Bank Ltd., Ulhasnagar, effective from the close of business on April 23, 2024. The bank may not grant or renew loans and advances, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as permitted in the RBI direction. The release says the action was taken in view of the bank's present liquidity position. It also states that no amount from savings, current, or other depositor accounts may be withdrawn, though set-off of loans against deposits is allowed subject to the stated conditions. RBI notes this is not a cancellation of banking licence and that the directions will remain in force for six months, subject to review.