1. Sadbhav Nagrik Sahakari Bank Maryadit, Chhatarpur
The RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 07, 2025.
Key Details
| Detail | Description |
| Effective Date of Directions | Close of business on October 07, 2025. |
| Duration | Six months from the close of business on October 07, 2025, subject to review. |
| Immediate Restrictions | Cannot grant/renew loans, make investments, incur liabilities (including fresh deposits), or dispose of assets without prior RBI approval. |
| Withdrawal Limit | Permitted withdrawal of a sum not exceeding ₹5,000/- (Rupees Five Thousand only) of the total balance. |
| Loan Set-off | Allowed to set off loans against deposits subject to conditions. |
| Permitted Expenditure | May incur expenditure for essential items like salaries, rent, and electricity bills. |
| Deposit Insurance | Eligible depositors entitled to a claim up to ₹5,00,000/- (Rupees Five Lakh only) from DICGC. |
| Licence Status | Not construed as cancellation of the banking license; banking business continues subject to restrictions. |
Root Cause Analysis (RCA)
The Directions were necessitated due to:
- The bank’s current liquidity position.
- Lack of concrete efforts by the bank to address supervisory concerns.
- The need to protect the interest of depositors.
Preventive Controls
- Strict adherence to all restrictions on lending, investments, and fresh deposits.
- Implementation of a time-bound action plan to address all outstanding supervisory concerns identified by the RBI.
- Limiting operational expenditure only to essential items as specified in the Directions.
Lesson Learnt
A bank must treat supervisory concerns with utmost seriousness and demonstrate concrete, timely efforts to rectify deficiencies, especially those impacting liquidity and depositor interest. Failure to act decisively can lead to severe restrictions on core banking operations.
RBI Press Release
2. Samarth Sahakari Bank Ltd., Solapur, Maharashtra
The RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 07, 2025.
Key Details
| Detail | Description |
| Effective Date of Directions | Close of business on October 07, 2025. |
| Duration | Six months from the close of business on October 07, 2025, subject to review. |
| Immediate Restrictions | Cannot grant/renew loans, make investments, incur liabilities (including fresh deposits), or dispose of assets without prior RBI approval. |
| Withdrawal Limit | Directed not to allow withdrawal of any amount from any depositor account. |
| Loan Set-off | Allowed to set off loans against deposits subject to conditions. |
| Permitted Expenditure | May incur expenditure for essential items like salaries, rent, and electricity bills. |
| Deposit Insurance | Eligible depositors entitled to a claim up to ₹5,00,000/- (Rupees Five Lakh only) from DICGC. |
| Licence Status | Not construed as cancellation of the banking license; banking business continues subject to restrictions. |
Root Cause Analysis (RCA)
The Directions were necessitated due to:
- The bank’s current liquidity position.
- Lack of concrete efforts by the bank to address supervisory concerns.
- The need to protect the interest of depositors.
Preventive Controls
- Strict compliance with the “no withdrawal” directive due to severe liquidity issues.
- Limiting operations strictly to permitted activities and essential expenditures.
- Implementation of concrete and time-bound efforts to address all supervisory concerns, prioritizing the restoration of financial health.
Lesson Learnt
A lack of improvement following RBI engagement and severe liquidity concerns—indicated by a complete freeze on depositor withdrawals—is a critical failing that triggers maximum operational restrictions by the regulator to safeguard the financial system and remaining depositor interests.
RBI Press Release
3. Samarth Urban Co-operative Bank Ltd., Osmanabad
The RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 07, 2025.
Key Details
| Detail | Description |
| Effective Date of Directions | Close of business on October 07, 2025. |
| Duration | Six months from the close of business on October 07, 2025, subject to review. |
| Immediate Restrictions | Cannot grant/renew loans, make investments, incur liabilities (including fresh deposits), or dispose of assets without prior RBI approval. |
| Withdrawal Limit | Directed not to allow withdrawal of any amount from any depositor account. |
| Loan Set-off | Allowed to set off loans against deposits subject to conditions. |
| Permitted Expenditure | May incur expenditure for essential items like salaries, rent, and electricity bills. |
| Deposit Insurance | Eligible depositors entitled to a claim up to ₹5,00,000/- (Rupees Five Lakh only) from DICGC. |
| Licence Status | Not construed as cancellation of the banking license; banking business continues subject to restrictions. |
Root Cause Analysis (RCA)
The Directions were necessitated due to:
- The bank’s current liquidity position.
- Lack of concrete efforts by the bank to address supervisory concerns.
- The need to protect the interest of depositors.
Preventive Controls
- Strict compliance with the ‘no withdrawal’ directive, allowing only loan set-offs.
- Immediate review and overhaul of operational and financial management to address the liquidity crisis.
- Full cooperation with the RBI to ensure necessary actions are taken to meet supervisory expectations.
Lesson Learnt
The severe action of stopping all withdrawals and imposing strict operational restrictions highlights that critical liquidity issues and a failure to proactively resolve long-standing supervisory concerns will result in the RBI imposing emergency measures to stabilize the institution and safeguard public funds.
RBI Press Release
4. Irinjalakuda Town Co-operative Bank Ltd.
The RBI superseded the Board of Directors under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), on October 07, 2025.
Key Details
| Detail | Description |
| Action Taken | Supersession of the Board of Directors. |
| Duration of Supersession | For a period of 12 months. |
| Administrator Appointed | Shri Raju S Nair, former Vice President, Federal Bank. |
| Advisors Appointed | A ‘Committee of Advisors’ including Shri Mohanan K and Shri T.A. Mohamed Sageer was appointed to assist the Administrator. |
| Prior Action | The bank was already under Directions issued by the RBI on July 30, 2025. |
Root Cause Analysis (RCA)
The action was necessitated due to material concerns stemming from:
- Continued poor financial condition observed in the bank.
- Continued poor governance standards observed in the bank.
- Lack of adequate improvement following previous Directions.
Preventive Controls
- The new Administrator must implement immediate and effective measures to correct poor governance standards.
- Development and execution of a comprehensive plan to address and improve the continued poor financial condition.
- Strict compliance with the earlier Directions issued by the RBI on July 30, 2025.
Lesson Learnt
Persistent poor financial condition coupled with inadequate governance standards poses a severe threat to a bank’s stability, often culminating in the RBI exercising its power to supersede the management to protect the institution and depositors.