Shushruti Souharda Sahakara Bank Niyamita, Bengaluru

RBI cancelled the banking licence of Shushruti Souharda Sahakara Bank Niyamita, Bengaluru. The bank must cease banking business with effect from the close of business on July 05, 2023.

The bank must stop all banking operations immediately from the close of business on July 05, 2023, including acceptance and repayment of deposits. Depositors will rely on liquidation and DICGC insurance, with eligible claims capped at ₹5,00,000 per depositor, and the Registrar of Cooperative Societies is expected to move toward winding up and appointment of a liquidator.

• Section 11(1) of the Banking Regulation Act, 1949
• Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949
• Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949

+2 more in the case brief

RBI extended its existing Section 35A directions on Shushruti Souharda Sahakara Bank Niyamita, Bengaluru for another three months. The directive continues unchanged from April 08, 2023 to July 07, 2023, subject to review.

The bank remains under the same RBI operating conditions for the extended period, with the directive continuing unchanged until July 07, 2023 unless reviewed earlier. This affects the bank’s operations and, indirectly, its customers and counterparties to the extent the original directions restrict activity.

• Section 35A read with Section 56 of the Banking Regulation Act, 1949
• sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949

RBI extended its existing Section 35A directions on Shushruti Souharda Sahakara Bank Niyamita, Bengaluru for another three months. The directive continues unchanged.

The bank remains subject to the same operational restrictions imposed under the existing RBI directive for the additional three-month period. The extension affects the bank’s operations and any stakeholders subject to those restrictions until April 07, 2023, unless RBI reviews or modifies the order earlier.

• Section 35A read with Section 56 of the Banking Regulation Act, 1949
• sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949

RBI extended the existing Section 35A directions against Shushruti Souharda Sahakara Bank Niyamita, Bengaluru. The order continues for three more months, from October 08, 2022 to January 07, 2023.

The bank remains under the same RBI-imposed operational conditions for the extended period and must continue complying with the existing directive until January 07, 2023, unless modified earlier on review. No new penalty is imposed, but the bank’s operations continue to be constrained under the standing directions.

• Section 35A read with Section 56 of the Banking Regulation Act, 1949
• sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949

RBI placed Shushruti Souharda Sahakara Bank Niyamita, Bangalore, under Section 35A restrictions from April 07, 2022. The bank can continue operating only with significant limits, including a ₹5,000 withdrawal cap and prior approval for several activities.

The bank remains open but under tight RBI-supervised constraints. Borrowers cannot receive fresh lending or renewals without approval, deposit-taking and many payments are restricted, and depositors face a withdrawal ceiling of ₹5,000 subject to conditions until the directions are modified or expire.

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

RBI imposed a ₹20 lakh penalty on Shushruti Souharda Sahakara Bank Niyamita, Bengaluru. The penalty was for non-compliance with RBI directions on income recognition, asset classification and provisioning for UCBs.

The bank must absorb the financial penalty and continue complying with RBI's applicable directions on income recognition, asset classification and provisioning. The action does not invalidate customer transactions, but it signals regulatory non-compliance and may increase supervisory scrutiny.

• Section 47 A (1) (c)
• Section 46 (4) (i)
• Section 56 of the Banking Regulation Act, 1949