APEX COOP BANK OF URBAN BANK OF MAH.&GOA vs MAHARASHTRA STATE COOP BANK

The Supreme Court addressed the legality of the RBI's grant of a banking license to the Appellants under Section 22(1) and 56(o) of the Banking Regulation Act, 1949, following a challenge to a Notification and directions issued under the NABARD Act and Maharashtra Co-operative Societies Act. The Court held that the Notification and directions were quashed, thereby necessitating a review of the RBI's decision to grant the license. However, it maintained that the license would remain operative until the RBI made a fresh decision, establishing the principle that regulatory compliance is essential for banking operations.