Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – The Industrial Co-operative Bank Ltd., Guwahati

Case Brief

RBI issued fresh directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 against The Industrial Co-operative Bank Ltd., Guwahati. The bank is barred, without prior written approval of RBI, from granting or renewing loans and advances, making investments, incurring liabilities including borrowing and fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets except as allowed in the direction. Depositor withdrawals are restricted to a maximum of ₹35,000 per depositor, though certain essential expenses such as salaries, rent, and electricity are permitted. RBI said the action was necessary because the bank had not taken concrete steps to address supervisory concerns and protect depositor interests. The directions do not amount to cancellation of the banking licence; the bank may continue business subject to these restrictions for six months starting from the close of business on July 04, 2025.