The Reserve Bank of India has extended its directives under Section 35A read with Section 56 of the Banking Regulation Act, 1949, for Motiram Agrawal Jalna Merchants Co-operative Bank Ltd and Sadbhav Nagrik Sahakari Bank Maryadit. The extensions prolong the period of operation of these directives by three months, from October 10, 2026, and October 7, 2026, respectively, to January 10, 2027, and January 7, 2027, subject to review, according to RBI press releases.
The RBI initially issued these directives for six months and had previously extended them up to October 2026. The latest extensions reflect the RBI's continued exercise of powers under the Banking Regulation Act to ensure public interest safeguards. The central bank clarified that these extensions should not be interpreted as satisfaction with the financial positions of the banks. All other terms and conditions of the original directives remain unchanged, as stated by RBI Chief General Manager Brij Raj.
These extensions highlight ongoing regulatory oversight of cooperative banks facing financial or operational challenges. The RBI's use of Section 35A directives aims to protect depositors and maintain stability in the cooperative banking sector. Similar measures have been applied to other cooperative banks in recent years, reflecting a cautious approach amid sector vulnerabilities. The extensions underscore the RBI’s role in closely monitoring banks that require intervention without immediately resorting to more severe actions like mergers or liquidations.
The directives for Motiram Agrawal Jalna Merchants Co-operative Bank Ltd and Sadbhav Nagrik Sahakari Bank Maryadit will now remain in force until January 10 and January 7, 2027, respectively, with the RBI set to review the situation before these dates, according to the official RBI statements.