Case Brief
What Happened
RBI issued fresh directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 against The Rajapur Sahakari Bank Ltd., Mumbai. Effective from the close of business on June 14, 2023, the bank is prohibited from granting or renewing loans and advances, making investments, incurring liabilities (including borrowals and acceptance of fresh deposits), disbursing payments, entering into compromises or arrangements, and selling or otherwise disposing of properties or assets without prior RBI approval, except as specifically allowed in the direction. Depositor withdrawals are capped at ₹15,000 per depositor across savings/current/other accounts, subject to the stated conditions. RBI clarified that the order is not a cancellation of banking licence and that the bank may continue operations subject to these restrictions for six months, subject to review.