PRESS RELEASE Reserve Bank of India Press

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

What happened
Based on Reserve Bank of India Press · Aug 28, 2026

The Reserve Bank of India restricted Ashok Sahakari Bank Ltd., Ahmednagar, from certain banking activities under Banking Regulation Act provisions to address supervisory concerns and protect depositors.

🚩 Report a correction ↗ Open source
Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – Ashok Sahakari Bank Ltd., Ahmednagar
Reserve Bank of India Press — Reserve Bank of India
Key points
·
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.
·
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.
·
These Directions are necessitated due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interests of depositors of the bank.
·
RBI has in the recent past engaged with the Board and Senior Management of the bank for improvement in its functioning.

The Reserve Bank of India (RBI) issued directions to Ashok Sahakari Bank Ltd., Ahmednagar, restricting its banking operations effective August 28, 2026. The bank cannot grant loans, renew advances, make investments, or incur liabilities without prior RBI approval. Depositors are barred from withdrawing funds except for essential expenses like salaries and bills, as specified in the RBI directive. The restrictions aim to address supervisory concerns arising from recent developments in the bank’s operations.

The RBI cited a lack of concrete efforts by the bank to address supervisory concerns and protect depositors as the reason for these directions. The central bank had previously engaged with the bank’s board and senior management to improve its functioning. The restrictions are intended to safeguard depositor interests amid the bank’s current liquidity challenges and operational issues.

Eligible depositors of Ashok Sahakari Bank Ltd. will receive deposit insurance claims up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) if they submit willingness and complete verification. Depositors should contact bank officials for further details or visit the DICGC website at www.dicgc.org.in for information on claim procedures and eligibility criteria.

The RBI clarified that these directions do not constitute a license cancellation, and the bank may continue operations under specified restrictions until its financial position improves. The RBI will monitor the bank’s status and may modify or extend the directions as necessary to protect depositors. The restrictions are currently valid for six months from August 28, 2026, subject to periodic review.

Original source → Deals on Clipraptor.com →