Case Brief
What Happened
RBI issued Section 35A directions to The United Cooperative Bank Limited, Bagnan, West Bengal, effective from the close of business on July 18, 2018. The order imposed significant operating restrictions: the bank could not grant or renew loans and advances, make investments, incur liabilities including borrowings and fresh deposit acceptance, make payments, or dispose of assets without prior RBI approval, subject to the terms in the earlier directions dated July 12, 2018. Depositors were allowed to withdraw only up to ₹1,000 from each savings/current/other deposit account, with possible adjustment against any borrower or surety liability. RBI clarified that the directions should not be construed as cancellation of the banking licence and stated that the bank would continue banking business under restrictions until its financial position improved, subject to review and possible modification.