The Seva Vikas Co-operative Bank Ltd., Pune, Maharashtra

RBI cancelled the licence of The Seva Vikas Co-operative Bank Ltd., Pune, Maharashtra. The bank must cease banking business with immediate effect and the regulator has asked for winding up and appointment of a liquidator.

With immediate effect from the close of business on October 10, 2022, the bank cannot conduct banking business, including accepting or repaying deposits. The regulator has also sought winding up and liquidation, and depositors’ recovery will be through DICGC insurance claims up to the statutory ceiling, subject to the applicable provisions.

• 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 the existing Section 35A directions on The Seva Vikas Cooperative Bank Ltd., Pune, until October 12, 2022. The underlying restrictions and conditions remain unchanged.

The bank continues to operate under the same RBI restrictions until October 12, 2022, unless further modified. Customers and counterparties remain subject to the operational limits already imposed under the directions.

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

RBI extended its existing Section 35A directions on The Seva Vikas Cooperative Bank Ltd., Pune, Maharashtra. The restriction continues unchanged until July 12, 2022.

The bank remains subject to the same RBI operating conditions until July 12, 2022. Its business activities continue under the existing restrictions, and the public is informed that the earlier directions have not been lifted.

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

RBI placed The Seva Vikas Co-operative Bank Limited, Pune under Section 35A directions, curbing several core banking activities. Depositor withdrawals are capped at ₹1,000 subject to conditions.

The bank must operate under RBI-imposed restrictions and cannot expand lending, accept fresh deposits, or freely meet obligations without approval. Depositors can withdraw only up to ₹1,000 from the total balance across their accounts, subject to the stated 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 Rs 55 lakh penalty on Seva Vikas Cooperative Bank Limited, Pune for multiple non-compliances with RBI directions. The issues related to end-use of funds, IRAC norms, and retrospective restructuring of loan accounts.

The bank must absorb the penalty and address the compliance weaknesses identified by RBI, especially around loan monitoring, asset classification/provisioning, and restructuring practices. The action has no direct restriction on operations, but it signals heightened regulatory scrutiny for the bank and may require stronger internal controls and compliance remediation.

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