Case Brief
What Happened
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 against Saibaba Janata Sahakari Bank Limited, Latur. From the close of business on July 22, 2022, the bank was barred from, without prior written approval, granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, making payments, entering compromises or arrangements, and disposing of assets, subject to the specific RBI direction. The release also states that a depositor may withdraw up to ₹25,000 across all accounts, subject to the conditions in the direction. RBI clarified that the order should not be construed as a cancellation of the bank's licence, that the bank may continue to undertake banking business with restrictions, and that the directions remain in force for six months and are subject to review.