Case Brief
The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 (as applicable to co-operative societies) to Urban Co-operative Bank Ltd., Dehradun. Effective from the close of business on February 10, 2026, the bank cannot, without prior written RBI approval, grant or renew loans and advances, make investments, incur liabilities including borrowings and fresh deposit acceptance, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as specified in the RBI direction. RBI also barred withdrawals from savings, current, and other accounts, while allowing limited set-off of loans against deposits and certain essential expenditures such as salaries, rent, and electricity bills. RBI stated the action arose from supervisory concerns and was intended to protect depositors; eligible depositors may claim insurance up to ₹5,00,000 from DICGC subject to conditions. The release clarifies that the directions are not a cancellation of the banking licence and will remain in force for six months from the effective date, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank