Case Brief
What Happened
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Shree Mahalaxmi Mercantile Co-operative Bank Ltd., Dabhoi, effective from the close of business on March 03, 2023. The bank is barred from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets except as allowed in the direction. Depositors may withdraw up to ₹30,000 from the total balance across all accounts, subject to the stated conditions. RBI clarified that the directions are not a cancellation of the banking licence, and they remain in force for six months from March 03, 2023, subject to review and possible modification.