The Reserve Bank of India (RBI) has taken decisive measures against two urban co-operative banks amid concerns over their financial health and governance. While Jijamata Mahila Sahakari Bank Ltd., Satara, has had its banking licence cancelled, the RBI has superseded the board of directors of Irinjalakuda Town Co-operative Bank in Kerala and appointed an administrator to manage its affairs.
The RBI cancelled the licence of Jijamata Mahila Sahakari Bank with effect from the close of business on October 7, 2025, citing the bank’s poor financial position and failure to comply with regulatory norms under the Banking Regulation Act, 1949 (as applicable to co-operative societies).
Depositors will be eligible to receive insurance claims of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), with around 94.41% of total deposits insured as of September 30, 2024.
The Satara-based bank had faced a licence cancellation earlier on June 30, 2016, which was later restored on October 23, 2019, following an appeal. The Appellate Authority had mandated a forensic audit for FY 2013–14, which could not be completed due to non-cooperation by the bank. Subsequent assessments revealed continued deterioration in its finances.
The RBI noted that the bank lacks adequate capital and earning prospects, and its continuance is “prejudicial to the interests of its depositors.” The Maharashtra Registrar of Co-operative Societies has been requested to initiate the bank’s winding-up process and appoint a liquidator.
Meanwhile, in Kerala, the RBI has superseded the board of Irinjalakuda Town Co-operative Bank for a period of 12 months under Sections 36AAA and 56 of the Banking Regulation Act. Raju S. Nair, former Vice President of Federal Bank, has been appointed as Administrator, supported by a Committee of Advisors including Mohanan K., former Deputy General Manager of South Indian Bank, and T.A. Mohamed Sageer, former Vice President of Federal Bank.
The central bank cited “material concerns emanating from continued poor financial condition and governance standards” as reasons for the move. Earlier, on July 30, 2025, the RBI had issued directions restricting the bank’s operations under Section 35A(1) due to financial stress. The regulator emphasized that these interventions are aimed at ensuring prudent management, protecting depositors, and maintaining overall stability in the co-operative banking sector.
With these actions, the RBI has sent a clear signal that it will not compromise on governance and financial discipline in the co-operative banking space, underscoring its commitment to safeguarding depositor interests across India.