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) issued directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 to Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd. The directions, effective from December 16, 2025, impose restrictions on the bank's operations due to material supervisory concerns. The directions will be in force for six months from December 16, 2025, and are subject to review.
**Key Points / Main Content**
* **Restrictions on Bank Operations:**
* The bank cannot grant or renew loans and advances without prior RBI approval.
* The bank cannot make investments or incur any liability (including accepting fresh deposits) without prior RBI approval.
* The bank cannot disburse or agree to disburse payments.
* The bank cannot enter into any compromise or arrangement without prior RBI approval.
* The bank cannot sell, transfer, or dispose of properties or assets except as notified in the RBI Direction dated December 15, 2025.
* The bank cannot allow depositors to withdraw any amount from their savings bank, current, or other accounts.
* The bank is allowed to set off loans against deposits subject to the conditions stated in the RBI Directions.
* The bank may incur expenditure on essential items like salaries, rent, and electricity bills as specified in the Directions.
* **Reason for Directions:**
* The directions are necessary due to material supervisory concerns.
* The directions aim to protect the interests of the bank's depositors.
* **Deposit Insurance:**
* Eligible depositors are entitled to receive up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to DICGC Act, 1961 provisions.
* Depositors must submit their willingness and undergo verification.
* Depositors can contact the bank or visit the DICGC website (www.dicgc.org.in) for more information.
* **Banking License and Monitoring:**
* The issuance of these directions should not be interpreted as a cancellation of the bank's banking license.
* The bank will continue banking business subject to the specified restrictions until its financial situation improves.
* The RBI will continue to monitor the bank's position and take necessary actions.
**Impact Analysis**
**Depositors**
* **Impact:** Restrictions on withdrawals from all types of accounts; potential access to deposit insurance up to ₹5,00,000.
* **Action Required:** Submit willingness for deposit insurance claims and cooperate with verification processes; contact the bank for further information.
**Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd**
* **Impact:** Restrictions on core banking operations, including lending, investments, and acceptance of deposits.
* **Action Required:** Comply with all RBI directions; display the RBI direction on the bank's website/premises; facilitate deposit insurance claims for eligible depositors; improve financial position to have the restrictions lifted.
**Reserve Bank of India (RBI)**
* **Impact:** Increased oversight of the bank's operations.
* **Action Required:** Monitor the bank's position, take necessary actions, and modify the directions as warranted.
Key Entities Referenced
Banking Regulation Act, 1949: Governs the regulation of banking companies in India.
Section 35 A: Section of the Banking Regulation Act, 1949, related to the power of the Reserve Bank to give directions.
Reserve Bank of India (RBI): The central bank of India, which issued the directions.
Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, Tal. Niphad, Dist. Nashik: The cooperative bank to which the directions apply.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Provides deposit insurance and credit guarantee in India.
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