Case Brief
What Happened
RBI issued directions to Mogaveera Co-operative Bank Ltd., Bombay under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on June 12, 2026. The bank is prohibited, without prior written approval of RBI, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering compromises or arrangements, and selling or transferring assets except as specifically allowed. Depositors may withdraw up to ₹1,00,000 subject to conditions, and the bank may incur certain essential expenses such as salaries, rent, and electricity. RBI said the directions were necessary because the bank had not taken concrete efforts to address supervisory concerns and protect depositor interests. The release also states that eligible depositors may claim deposit insurance up to ₹5,00,000 through DICGC and clarifies that the directions are not a cancellation of the bank's licence; they remain in force for six months from the close of business on June 12, 2026, subject to review.