Case Brief
What Happened
RBI issued directions to Shushruti Souharda Sahakara Bank Niyamita, Bangalore under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on April 07, 2022. The bank was prohibited, without RBI's prior written approval, 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 transferring assets except as permitted under the direction. Depositors were allowed to withdraw only up to ₹5,000 from the aggregate balance across savings, current, or other accounts, subject to conditions stated by RBI. The release clarifies that this is not a cancellation of banking licence and that the bank will continue to undertake banking business with restrictions for six months, subject to review.