Case Brief
What Happened
RBI issued fresh directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to National Urban Co-operative Bank Ltd., Pratapgarh (Uttar Pradesh), effective from the close of business on April 15, 2024. The directions restrict the bank from granting or renewing loans and advances, making investments, incurring liabilities (including borrowings and acceptance of fresh deposits), disbursing or agreeing to disburse payments, entering compromises/arrangements, and disposing of assets except as permitted. Depositors may withdraw up to ₹10,000 from the total balance across accounts, subject to stated conditions, and eligible depositors may also access deposit insurance claim amounts up to ₹5,00,000 under DICGC provisions. RBI clarified that this is not a cancellation of banking licence and that the bank will continue to undertake banking business with restrictions until its financial position improves, subject to review after six months.