Case Brief
The Reserve Bank of India issued Directions to Puducherry Co-operative Urban Bank Ltd under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 21, 2026. The bank cannot undertake several activities without prior RBI approval, including granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering into compromise/arrangement, or disposing of assets except as specified. RBI also capped withdrawals at ₹5,000 per depositor (subject to conditions) and allowed only limited essential expenditure and loan set-off activity. The action was taken due to supervisory concerns and the bank's failure to make concrete efforts to improve its functioning and protect depositors' interests. The Directions are for six months and are subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location