Case Brief
The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Pusad Urban Cooperative Bank Ltd., Pusad. Effective from the close of business on November 07, 2025, the bank cannot grant or renew loans, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, enter compromises or arrangements, or sell/transfer/dispose of assets except as specifically permitted in the RBI directions. The bank may allow limited withdrawals up to ₹5,000 per depositor account and may incur only certain essential expenses such as salaries, rent and electricity. RBI said the directions were imposed because of the bank's deteriorating liquidity position and lack of concrete corrective efforts, with the objective of protecting depositors. The release clarifies that this is not a cancellation of the banking licence and that the bank will continue operations only subject to these restrictions for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location