Case Brief
What Happened
The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Sumerpur Mercantile Urban Co-operative Bank Ltd., Sumerpur, Pali. Effective from the close of business on December 06, 2022, the bank is barred from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering into compromises or arrangements, and disposing of assets except as specifically allowed in the direction. RBI also stated that, considering the bank's liquidity position, no amount from deposits in savings, current, or other accounts may be withdrawn, although set-off of loans against deposits is permitted under the stated conditions. The order remains in force for six months from the close of business on December 06, 2022, subject to review, and RBI clarified it is not a cancellation of the bank's licence.