Case Brief
What Happened
RBI issued fresh Directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 to The Suri Friends’ Union Co-operative Bank Limited, Suri (West Bengal), effective from the close of business on July 22, 2022. The bank was barred, without prior RBI approval in writing, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing payments, entering compromises or arrangements, and selling/transferring/disposal of assets except as permitted. Depositors were allowed to withdraw up to ₹50,000 in aggregate from balances across accounts, subject to the stated conditions. RBI clarified that the direction is not a cancellation of banking licence and that the bank may continue banking business with restrictions until its financial position improves, for an initial period of six months subject to review.