Case Brief
What Happened
The Reserve Bank of India issued directions under Section 35A of the Banking Regulation Act, 1949 (read with Section 56) to The C.K.P. Co-operative Bank Ltd., Mumbai, Maharashtra. Effective from the close of business on May 02, 2014, the bank was restricted from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and disposing of assets except as permitted in the cited RBI directions. RBI allowed withdrawals of up to Rs. 1,000 per depositor per account, subject to conditions. The release explicitly states that this should not be construed as cancellation of banking licence and that the bank would continue to undertake banking business with restrictions until its financial position improves.