Case Brief
What Happened
The Reserve Bank of India has modified, rather than withdrawn, the directions issued to The Mapusa Urban Co-operative Bank of Goa Ltd, Goa under Section 35A read with Section 56 of the Banking Regulation Act, 1949. The original directions dated July 24, 2015 had already been extended from time to time, most recently up to August 18, 2019. In this release, RBI added a new clause permitting set-off of loans against deposits, but only subject to several conditions including KYC compliance, exclusion of third-party deposits, due notice, and prior written consent in certain cases. RBI also states that all other terms and conditions of the directions remain unchanged and that the modified directions continue to apply, subject to review.