Case Brief
What Happened
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Purvanchal Co-operative Bank Limited, Ghazipur. Effective from the close of business on August 29, 2023, the bank cannot grant or renew loans and advances, make investments, incur liabilities (including borrowings and acceptance of fresh deposits), disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as permitted in the RBI direction. Due to the bank’s liquidity position, withdrawals from depositor accounts are also restricted, though set-off of loans against deposits may be allowed under stated conditions. RBI also noted eligible depositors may receive deposit insurance up to ₹5 lakh from DICGC. The directions are for six months from August 29, 2023, subject to review.