The Choundeshwari Sahakari Bank Ltd., Ichalkaranji, Kolhapur, Maharashtra

RBI issued directions under Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the Act as applicable to co-operative societies. From the close of business on August 30, 2014, the bank was barred from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, and entering compromises/arrangements or disposing of assets except as permitted. Depositors were allowed to withdraw only up to Rs 1,000 from each account, subject to RBI conditions. The release states the bank will continue banking business with restrictions until its financial position improves and that the directions are not, per se, a cancellation of banking licence.

From the close of business on August 30, 2014, the bank must operate under tight RBI controls and cannot expand lending, raise fresh deposits, or freely use funds/assets without prior written approval. Depositors face withdrawal caps, and all affected banking activities remain constrained until RBI modifies the directions.