Case Brief
What Happened
The Reserve Bank of India issued directions to United India Co-operative Bank Limited, Nagina, Bijnor under Section 35A read with Section 56 of the Banking Regulation Act, 1949. From the close of business on July 22, 2022, the bank was restrained from granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering compromises or arrangements, and disposing of assets without prior RBI approval. RBI also capped depositor access by directing that no amount from savings bank, current, or other accounts may be withdrawn, except for limited set-off of loans against deposits under the stated conditions. RBI clarified that the directions do not amount to cancellation of the banking licence and will operate for six months, subject to review and possible modification.