Case Brief
The Reserve Bank of India issued Directions to The Amanath Urban Co-operative Bank Ltd., Bangalore under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on June 12, 2024. The order restricts the bank from granting or renewing loans and advances, making investments, incurring liabilities including fresh borrowings and acceptance of fresh deposits, disbursing or agreeing to disburse payments, entering into compromises or arrangements, and selling or otherwise disposing of assets except as permitted in the RBI direction. Depositor withdrawals are capped at ₹60,000 across all accounts held by a depositor, subject to the stated conditions. RBI said the action was driven by material supervisory concerns, including poor financials, large accumulated losses, negative net worth for several years, and governance issues in the bank's One Time Settlement scheme. RBI clarified that the direction is not per se a cancellation of the banking licence and that the bank may continue banking business, including recovery of loans, within the imposed restrictions.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank