Case Brief
What Happened
Reserve Bank of India reviewed the financial position of Maratha Sahakari Bank Ltd., Mumbai and extended the existing Section 35A directions, originally issued on August 31, 2016 and modified on September 07, 2016, for another six months up to August 31, 2017. The revised directions increased the amount a depositor may withdraw in each savings, current, term deposit or other deposit account to ₹20,000, while also allowing set-off of loans against deposits only under specified conditions. The bank must also keep funds required for depositor payments separately in an escrow account and/or earmarked securities. The release makes clear that the extension and modification should not be construed as RBI being satisfied with the bank’s financial improvement.