Case Brief
What Happened
RBI issued directions to Imperial Urban Cooperative Bank Ltd., Jalandhar under Section 35A of the Banking Regulation Act, 1949 read with Section 56. The order, effective from the close of business on March 10, 2023, curtailed core operations: the bank could not grant or renew loans, make investments, incur liabilities, accept fresh deposits, disburse payments, or dispose of assets except as permitted. Withdrawals from depositor accounts were also restricted because of the bank's liquidity position, though loan set-off against deposits was allowed under specified conditions. RBI clarified that the directions were not a cancellation of banking licence, and stated they would remain in force for six months and be subject to review.