Case Brief
What Happened
RBI issued directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 to Raigad Sahakari Bank Limited, Mumbai. Effective from the close of business on July 18, 2022, the bank was barred from undertaking several core activities without prior RBI approval, including granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, making payments, entering into compromises or arrangements, and selling or disposing of assets, except as specifically allowed in the direction. Depositors were permitted to withdraw only up to ₹15,000 subject to conditions. RBI stated that the directions should not be construed as cancellation of the banking licence and that the bank would continue to undertake banking business with restrictions until its financial position improved. The directions were to remain in force for six months from the close of business on July 18, 2022, subject to review.