Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – Ashok Sahakari Bank Ltd., Ahmednagar
It is hereby notified for information of the public that in exercise of powers vested in it under sub section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India (RBI) vide Directive Ref. No.S4110 /12-22-377 / 2026-27 dated August 28, 2026 has issued certain Directions to Ashok Sahakari Bank Ltd., Ahmednagar , (“the bank”), whereby, as from the…
The Reserve Bank of India has issued directions to Ashok Sahakari Bank Ltd. located in Ahmednagar, under Section 35 A read with Section 56 of the Banking Regulation Act, 1949. As of the end of business on August 28, 2026, the bank is prohibited from granting or renewing loans, making investments, incurring liabilities, accepting fresh deposits, or disbursements of payments without prior approval from the RBI.
The bank may not allow withdrawals from depositors' savings, current, or other accounts, but is permitted to offset loans against deposits, provided certain conditions are met. The bank is allowed to spend on essential items such as employee salaries, rent, and electricity bills, as specified in the directions. The RBI's actions are aimed at addressing supervisory concerns and protecting depositor interests.
Eligible depositors will be able to claim deposit insurance up to a maximum of ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation, subject to verification. The RBI has engaged with the bank's board and senior management to improve its functioning, but the lack of progress has necessitated these measures. The directions will remain in effect for six months from the end of business on August 28, 2026, and are subject to review.
Written by urgent.news from Reserve Bank of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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