Case Brief
RBI issued fresh Directions to Sri Mahatma Basaveshwar Co-operative Bank Ltd., Afzalpur under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 08, 2026. The regulator said it had engaged with the bank's Board and senior management over the last few years, but the bank had failed to take concrete steps to address supervisory concerns and protect depositors, necessitating the Directions. The order prohibits the bank, without prior written RBI approval, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, making payments, or selling/transferring assets, and it also prevents withdrawals from savings, current, and other depositor accounts, subject to limited exceptions such as set-off of loans against deposits and essential expenses. RBI clarified that the order is not a licence cancellation and that the bank may continue banking business only within the stated restrictions for six months, subject to review.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank
- Location