Case Brief
The Reserve Bank of India issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Samarth Sahakari Bank Ltd., Solapur, Maharashtra, effective from the close of business on October 07, 2025. Under the order, the bank cannot, without prior written RBI approval, grant or renew loans and advances, make investments, incur liabilities including fresh deposits, disburse payments, enter into compromises or arrangements, or sell/transfer/dispose of assets except as permitted in the directions. RBI also barred the bank from allowing withdrawals from savings, current, or other depositor accounts, while allowing only limited set-off of loans against deposits and essential expenses such as salaries, rent and electricity as specified. RBI stated that it had engaged with the board and senior management earlier, but the bank had failed to take concrete steps to address supervisory concerns and protect depositor interests. The directions are valid for six months from the close of business on October 07, 2025, subject to review. RBI also clarified that the order is not, by itself, a cancellation of the bank’s banking licence.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Co-operative bank