Case Brief
What Happened
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 against Shankarrao Mohite Patil Sahakari Bank Ltd., Akluj. Effective from the close of business on February 24, 2023, the bank was barred from granting or renewing loans and advances, making investments, incurring liabilities, accepting fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets without prior RBI approval, except as specifically permitted in the direction. Depositors could withdraw only up to ₹5,000 from the total balance across their savings, current or other accounts, subject to the conditions in the order. RBI clarified that the direction does not itself cancel the banking licence and that the bank may continue banking business with restrictions for six months, subject to review and possible modification.