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 The Gauhati Cooperative Urban Bank Ltd. with effect from the close of business on December 17, 2025. Under the order, the bank cannot, without prior written RBI approval, grant or renew loans and advances, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse or agree to disburse payments, enter into compromises or arrangements, or sell, transfer or otherwise dispose of assets except as specified in the directive. RBI also limited withdrawals to ₹35,000 from the total balance in savings, current or other accounts of a depositor, while permitting set-off of loans against deposits subject to the stated conditions and allowing expenditure on essential items such as salaries, rent and electricity. RBI said it had engaged with the bank’s Board and senior management earlier, but the bank’s lack of concrete efforts to address supervisory concerns and protect depositors led to the directions. The release clarifies that this is not a cancellation of the banking licence; the bank may continue banking business only within the imposed restrictions for six months, subject to review.