Now Reading: RBI places Ashok Sahakari Bank under restrictions, caps withdrawals
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RBI places Ashok Sahakari Bank under restrictions, caps withdrawals
The Reserve Bank of India has placed Ashok Sahakari Bank Ltd., Ahmednagar, under strict directions effective August 28, 2026, barring it from granting loans, accepting fresh deposits, or making any payments without…
The Reserve Bank of India has placed Ashok Sahakari Bank Ltd., Ahmednagar, under strict directions effective August 28, 2026, barring it from granting loans, accepting fresh deposits, or making any payments without prior RBI approval. Depositors cannot withdraw money from savings or current accounts, though the bank may set off loans against deposits. The RBI cited supervisory concerns from recent material developments and the bank's failure to address them.
Eligible depositors can claim up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) after due verification. The RBI clarified that the directions do not amount to cancellation of the bank's license. The restrictions will remain in force for six months, subject to review.
Indian Opinion Analysis
This is the latest in a series of RBI crackdowns on troubled cooperative banks, often triggered by poor asset quality or governance failures. For depositors, the immediate concern is access to funds above the DICGC cover of Rs 5 lakh per depositor, those with larger sums face uncertainty until the bank's finances improve or a resolution plan emerges. The six-month timeline gives the bank a window to recapitalise or merge, but past cases show such restrictions often lead to licence cancellation or amalgamation with a stronger entity. The RBI will next review the bank's progress before the directions expire in February 2027.
The RBI will review the bank's progress before the directions expire in February 2027.
Source: rbi.org.in
This brief was synthesised by AI from the source linked above.
