Case Brief
What Happened
The Reserve Bank of India issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Samarth Urban Co-operative Bank Ltd., Osmanabad. The bank has been restricted from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, making payments, entering compromises/arrangements, and disposing of assets except as permitted in the RBI directions. In view of the bank's liquidity position, depositor withdrawals from savings, current, and other accounts are also barred, subject to limited set-off and essential expenditure exceptions. RBI said it had engaged with the board and senior management earlier, but the bank had not taken concrete steps to address supervisory concerns and protect depositors, necessitating the directions. The order is stated to remain in force for six months from the close of business on October 07, 2025, and RBI noted this is not a cancellation of the banking licence.