Directions under Section 35 A read with Section 56 of the Banking Regulation
Act, 1949 – The Bhavani Sahakari Bank Ltd., Mumbai
It is hereby notified for information of the public that in exercise of powers vested
in it under sub section (1) of Section 35A read with Section 56 of the Banking
Regulation Act, 1949, the Reserve Bank of India (RBI) vide Directive Ref. No.
CO.DOS.SED.No.S2770/12-22-023/2025-2026 dated July 03, 2025, has issued
certain Directions to The Bhavani Sahakari Bank Ltd., Mumbai (“the bank”),
whereby, as from the close of business on July 04, 2025, the bank shall not, without
prior approval of RBI in writing, grant or renew any loans and advances, make any
investment, incur any liability including borrowal of funds and acceptance of fresh
deposits, disburse or agree to disburse any payment whether in discharge of its
liabilities and obligations or otherwise, enter into any compromise or arrangement and
sell, transfer or otherwise dispose of any of its properties or assets except as notified
in the RBI Direction dated July 03, 2025, a copy of which has been directed to be
displayed on the bank’s website / premises for perusal by interested members of the
public. Considering the bank’s current liquidity position, the bank has been directed
not to allow withdrawal of any amount from savings bank or current accounts or any
other account of a depositor but is allowed to set off loans against deposits subject to
the conditions stated in the above RBI Directions. The bank may incur expenditure in
respect of certain essential items such as salaries of employees, rent, electricity bills,
etc., as specified in the said Directions.
- RBI has in the recent past engaged with the Board and Senior Management of the
bank for improvement in its functioning. However, lack of concrete efforts taken by the
bank to address the supervisory concerns and to protect the interest of depositors of
the bank, necessitated issuance of these Directions. - The eligible depositors would be entitled to receive deposit insurance claim amount
of their deposits upto a monetary ceiling of ₹5,00,000/- (Rupees Five Lakh only) in the
same capacity and in the same right, from the Deposit Insurance and Credit Guarantee
Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961,
based on submission of willingness by the depositors concerned and after due
verification. The depositors may contact the bank officials for further information.
Details may also be accessed on the DICGC website: www.dicgc.org.in. - The issue of the above Directions by the RBI should not per se be construed as
cancellation of the banking license by RBI. The bank will continue to undertake
banking business subject to restrictions specified in the said Directions till its financial
position improves. The RBI continues to monitor the position of the bank and will take
necessary actions including modifications of these Directions, as warranted,
depending upon circumstances and in the interest of the depositors.
- These Directions shall remain in force for a period of six months from the close of
business on July 04, 2025 and are subject to review.
