Case Brief
What Happened
The Reserve Bank of India issued directions under Section 35A of the Banking Regulation Act, 1949 (AACS) against Bhuj Mercantile Co-operative Bank Ltd., Ahmedabad (Gujarat), restricting the bank from undertaking core banking activities without prior RBI approval. The restrictions included lending, investments, borrowings, acceptance of fresh deposits, payments, compromises/arrangements, and disposal of assets. The bank was permitted limited withdrawals by depositors, first up to Rs 10,000, then Rs 30,000, and later up to Rs 70,000 per depositor under the November 19, 2012 modification, subject to adjustment of any borrowal/surety liabilities. The directions were extended to remain in force until April 2, 2013, with other terms unchanged.