Case Brief
What Happened
RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Laxmi Cooperative Bank Limited, Solapur. Effective from the close of business on November 12, 2021, the bank was prohibited, without prior written approval of RBI, from granting or renewing loans and advances, making investments, incurring liabilities (including borrowings and fresh deposits), making payments, entering into compromises or arrangements, and selling or disposing of assets except as permitted in the direction. The order also allowed only limited withdrawal of up to ₹1,000 per depositor across accounts, subject to the stated conditions. RBI clarified that the direction was not a cancellation of licence and that the bank would continue banking business with restrictions for six months, subject to review.