Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – Ashok Sahakari Bank Ltd., Ahmednagar

Case Brief

The Reserve Bank of India issued fresh directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Ashok Sahakari Bank Ltd., Ahmednagar. RBI said the action was driven by supervisory concerns stemming from recent material developments in the bank and the bank’s failure to take concrete corrective measures despite engagement with its board and senior management. Under the directions, the bank cannot, without prior written RBI approval, grant or renew loans, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, enter compromises or arrangements, or sell/transfer/dispose of assets, and it cannot allow withdrawals from depositor accounts except as permitted in the directions. The release states that the bank is not being cancelled and may continue banking business only within the restrictions. The directions are effective from close of business on August 28, 2026 and remain in force for six months, subject to review.