Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj

Case Brief

RBI has issued fresh Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj. Effective from the close of business on August 27, 2026, the bank must not, without prior RBI approval, grant or renew loans and advances, make investments, incur liabilities including acceptance of fresh deposits and borrowings, make payments, enter compromises or arrangements, or dispose of assets except as permitted. Depositors are also barred from withdrawing money from savings, current, or other accounts, though limited set-off of loans against deposits and certain essential expenditures are allowed under the directions. RBI said the action followed supervisory engagement and the bank's lack of concrete efforts to address concerns and protect depositors, and noted the bank will continue banking business only subject to these restrictions for six months, subject to review.