Case Brief
What Happened
The Reserve Bank of India extended the existing Directions against Bhopal Nagrik Sahakari Bank Ltd., Bhopal (M.P.) for a further six-month period from May 01, 2015 to October 31, 2015, subject to review. These Directions, originally effective from the close of business on October 31, 2012 and earlier extended from time to time, were issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56. Under the order, the bank cannot grant or renew loans and advances, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of its properties or assets without prior written approval of the RBI, except as specifically permitted in the directions. Depositors are allowed to withdraw only up to ₹1,000 from each savings, current, or other deposit account, subject to conditions. The release explicitly states that the directions should not be construed as cancellation of the bank’s licence and that the bank will continue banking business with restrictions until its financial position improves.