Case Brief
What Happened
The Reserve Bank of India issued directions to Sarvodaya Co-operative Bank Ltd., Mumbai under Section 35A of the Banking Regulation Act, 1949 read with Section 56 applicable to co-operative societies. Effective from the close of business on April 15, 2024, the bank is restricted from granting or renewing loans and advances, making investments, incurring liabilities including borrowing and accepting fresh deposits, disbursing payments, entering compromises or arrangements, and selling or disposing of assets except as permitted in the directions. Depositors may withdraw up to ₹15,000 subject to the stated conditions, and eligible depositors may also access deposit insurance claim amounts up to ₹5,00,000 under the DICGC framework. RBI clarified that the order is not a cancellation of the banking licence; the bank may continue operations with restrictions for six months, subject to review.