Case Brief
What Happened
The Reserve Bank of India extended the Section 35A directions already applicable to The Suri Friends’ Union Co-operative Bank Ltd., Suri, West Bengal, for a further six-month period from July 07, 2016 to January 06, 2017, subject to review. The release states that the bank had originally been placed under directions on April 07, 2014 because of its very precarious financial position, and those directions had been extended four times previously. The restrictions prevent the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposit acceptance, disbursing payments, entering compromises or arrangements, and selling/transferring assets except as permitted by RBI. Depositors may withdraw only up to ₹1,000 from each account, subject to the stated conditions. RBI also clarifies that the directions should not be construed as cancellation of the banking licence, and the bank may continue banking business with restrictions until its financial position improves.