Case Brief
RBI issued fresh directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Ltd., Nashik. The action was taken because of supervisory concerns arising from recent material developments in the bank and to protect depositor interests. The directions restrict the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering into compromises or arrangements, and selling/transferring/disposal of properties or assets without prior written approval of RBI, subject to specified exceptions. Depositor withdrawals are limited to ₹1,00,000 per account holder, subject to the conditions in the directions, and the bank may make only limited essential expenditures such as salaries, rent, and electricity. RBI clarified that this does not amount to cancellation of the banking licence; the bank may continue banking business subject to the restrictions, and the directions remain in force for six months from the close of business on July 17, 2026, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank