Case Brief
What Happened
RBI issued Section 35A read with Section 56 directions to National Urban Co-operative Bank Limited, Bahraich (U.P.) effective from the close of business on July 22, 2022. The bank was restricted from granting or renewing loans and advances, making investments, incurring liabilities including fresh borrowings and acceptance of deposits, disbursing payments, entering into compromises or arrangements, and selling or transferring assets without prior written approval of RBI. Depositors were allowed to withdraw up to ₹10,000 across all their accounts, subject to the stated conditions. RBI clarified that the directions are not a cancellation of banking licence and will remain in force for six months, subject to review.