Date: 2025-12-16Category: Not ApplicableState: Union GovernmentCountry: India
Directions under Section 35 A read with section 56 of the Banking Regulation Act, 1949– “Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, Tal. Niphad, Dist. Nashik”
**Executive Summary**
The Reserve Bank of India (RBI) has issued directions to Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, effective December 16, 2025, due to supervisory concerns. The directions impose restrictions on the bank's operations, including granting loans, making investments, and accepting deposits, without prior RBI approval. The directions are to protect the interests of depositors and will remain in force for six months, subject to review.
**Key Points / Main Content**
* **RBI Directions:**
* RBI issued directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949.
* The directions are detailed in Directive Ref. No. CO.DOS.SED.No.S6986/12-22-482/2025-2026 dated December 15, 2025.
* The bank must display a copy of the directions on its website/premises.
* **Operational Restrictions:**
* The bank is restricted from granting or renewing loans and advances.
* The bank cannot make any investments.
* The bank cannot incur any liability, including accepting fresh deposits.
* The bank cannot disburse any payment or enter into compromises or arrangements.
* The bank cannot sell, transfer, or dispose of any properties or assets, except as notified in the RBI Direction.
* **Deposit Withdrawals and Expenditures:**
* The bank cannot allow withdrawals from savings bank, current accounts, or any other depositor account.
* The bank is allowed to set off loans against deposits under certain conditions.
* The bank may incur expenditure for essential items like employee salaries, rent, and electricity bills.
* **Deposit Insurance:**
* Eligible depositors are entitled to receive deposit insurance claim amounts up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
* Claims are subject to the DICGC Act, 1961, and require willingness from depositors and due verification.
* Depositors can contact bank officials for more information or visit www.dicgc.org.in.
* **Ongoing Operations and Monitoring:**
* The issuance of these directions is not a cancellation of the banking license.
* The bank will continue banking business subject to the specified restrictions.
* The RBI will continue to monitor the bank's position and take necessary actions.
* **Duration and Review:**
* The directions are effective from the close of business on December 16, 2025.
* The directions will remain in force for six months and are subject to review.
**Impact Analysis**
**Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd**
*Impact*
Subject to operational restrictions that limit the bank's ability to conduct normal banking activities such as issuing loans, accepting deposits, and making investments.
*Action Required*
Display the RBI directions on its website/premises, adhere to restrictions, and cooperate with the RBI to improve its financial position.
**Depositors**
*Impact*
Restricted access to their funds due to withdrawal limitations and may need to file a claim with the DICGC for deposit insurance.
*Action Required*
Contact bank officials for information on deposit insurance claims and eligibility, and submit a willingness form for DICGC claims.
**Employees**
*Impact*
Potential uncertainty regarding the bank's future and their job security.
*Action Required*
Continue performing duties as directed and stay informed about the bank's situation and any updates from management or the RBI.
Key Entities Referenced
Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, Tal. Niphad, Dist. Nashik: A cooperative bank in Niphad, Nashik, to which the RBI has issued directions restricting its business activities.
Section 35 A read with section 56 of the Banking Regulation Act, 1949: The legal basis for the RBI's authority to issue directions to the specified bank.
Reserve Bank of India (RBI): The regulator issuing directions to the specified bank.
Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961: The Act under which the eligible depositors can claim insurance on their deposits.
Deposit Insurance and Credit Guarantee Corporation (DICGC): The entity providing deposit insurance to the depositors.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
RESERVE BANK OF INDIA
वेबसाइट : www.rbi.org.in/hindi संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
December 16, 2025
Directions under Section 35 A read with section 56 of the Banking Regulation
Act, 1949– “Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, Tal.
Niphad, Dist. Nashik”
It is hereby notified for the 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.
CO.DOS.SED.No.S6986/12-22-482/2025-2026 dated December 15, 2025, has
issued certain Directions to Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd,
Niphad Tal. Niphad, Dist. Nashik, (“the bank”), whereby, as from the close of
business on December 16, 2025, the bank shall not, without prior approval of RBI in
writing, grant or renew any loans and advances, make any investment, incur any
liability including borrowal of funds and acceptance of fresh deposits, disburse or
agree to disburse any payment whether in discharge of its liabilities and obligations or
otherwise, enter into any compromise or arrangement and sell, transfer or otherwise
dispose of any of its properties or assets except as notified in the RBI Direction dated
December 15, 2025, a copy of which has been directed to be displayed on the bank's
website/premises for perusal by interested members of the public. Considering the
bank's present liquidity position, the bank has been directed not to allow withdrawal of
any amount from savings bank or current accounts or any other account of a depositor,
but is allowed to set off loans against deposits subject to the conditions stated in the
above RBI Directions. The bank may incur expenditure in respect of certain essential
items such as salaries of employees, rent, electricity bills, etc., as specified in the said
Directions.
2. These Directions are necessitated due to material supervisory concerns emanating
from developments in the bank, and to protect the interests of depositors of the bank.
3. The eligible depositors would be entitled to receive deposit insurance claim amount
of their deposits up to a monetary ceiling of ₹5,00,000/- (Rupees Five Lakh only) in
the same capacity and in the same right, from the Deposit Insurance and Credit
Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC
Act, 1961, based on submission of willingness by the depositors concerned and after
due verification. The depositors may contact the bank officials for further information.
Details may also be accessed on the DICGC website: www.dicgc.org.in.
4. The issue of the above Directions by the RBI should not per se be construed as
cancellation of the banking license by the RBI. The bank will continue to undertake
banking business subject to restrictions specified in the said Directions till its financial
position improves. The RBI continues to monitor the position of the bank and will takenecessary actions, including modifications of these Directions, as warranted,
depending upon circumstances and in the interest of the depositors.
5. These Directions shall remain in force for a period of six months from the close of
business on December 16, 2025 and are subject to review.
(Brij Raj)
Press Release: 2025-2026/1715 Chief General Manager