Bhilwara Mahila Urban Co-operative Bank Ltd

RBI cancelled the licence of Bhilwara Mahila Urban Co-operative Bank Ltd., Bhilwara, Rajasthan, effective at close of business on August 31, 2018. The bank was also prohibited from conducting banking business and winding-up proceedings were initiated.

The bank must stop all banking operations immediately upon the effective date, including acceptance and repayment of deposits. Winding-up and liquidation proceedings are to follow, and depositors may seek repayment through DICGC up to the applicable insurance ceiling of Rs 1 lakh per depositor, subject to usual terms and conditions.

• section 11(1) of the Banking Regulation Act, 1949
• section 22(3)(d) read with section 56 of the Banking Regulation Act, 1949
• section 22(3)(a) read with section 56 of the Banking Regulation Act, 1949

+3 more in the case brief

RBI extended the existing Section 35A directive on Bhilwara Mahila Urban Co-operative Bank Ltd. for another three months. The directive’s other terms remained unchanged.

The bank remains subject to the same RBI operating restrictions for the extension period, with the directive continuing unchanged until October 09, 2018 subject to review. Customers and counterparties must continue to operate within the constraints imposed by the existing order.

• Section 35A of the Banking Regulation Act, 1949
• Section 56 of the Banking Regulation Act, 1949

RBI placed The Bhilwara Mahila Urban Co-operative Bank Ltd., Bhilwara under Section 35A restrictions. The bank can continue operating, but lending, investments, liabilities, fresh deposits, and many payments/asset actions are curtailed, with withdrawals capped.

The bank must operate under tight RBI-imposed constraints until further modification. Depositors face a sharp withdrawal cap, while the bank cannot freely lend, invest, raise liabilities, accept fresh deposits, or dispose of assets without RBI approval. The restrictions affect customers, counterparties, and the bank’s day-to-day treasury and lending operations.

• Section 35A of the Banking Regulation Act, 1949 (AACS)
• Section 56 of the Banking Regulation Act, 1949

RBI imposed a Rs 1 lakh penalty on Bhilwara Mahila Urban Co-operative Bank Limited, Bhilwara. The bank was found to have violated norms on unsecured advances and loans to relatives of directors.

The bank must absorb the monetary penalty; the release does not describe any suspension, restriction, or other operational curtailment. The forward-looking impact is limited to the financial penalty and the compliance signal to avoid similar lending and governance breaches going forward.

• Section 47A (1)(b) read with section 46(4) of the Banking Regulation Act, 1949 (AACS)