Case Brief
What Happened
The Reserve Bank of India issued Directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 to Deccan Urban Co-operative Bank Ltd., Vijayapur, Karnataka. The order restricts the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowing and acceptance of fresh deposits, disbursing payments, entering compromises or arrangements, and selling or disposing of assets without prior RBI approval, except as specifically allowed in the directive. The release also caps withdrawals at ₹1,000 from a depositor’s total balance across accounts, while permitting set-off of loans against deposits under the stated conditions. The directions were to remain in force for six months from the close of business on February 19, 2021, subject to review.