Case Brief
What Happened
RBI issued fresh Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Lokapavani Mahila Sahakari Bank Niyamitha, Mandya. From the close of business on July 30, 2025, the bank cannot grant or renew loans, make investments, incur liabilities, accept fresh deposits, disburse payments, or sell/transfer assets without prior RBI approval, subject to limited exceptions in the Direction. RBI cited supervisory concerns and the bank's failure to take concrete steps to improve functioning and protect depositors; the order remains in force for six months, subject to review, and RBI clarified that the directions are not a cancellation of the banking licence.