In a recent development, the Reserve Bank of India (RBI) has announced the extension of Directions on two urban cooperative banks, Saibaba Janata Sahakari Bank Limited in Latur, Maharashtra, and The National Co-operative Bank Ltd. in Bangalore. This decision comes a day after the RBI levied fines on five Urban Cooperative Banks (UCBs).
The RBI extended the period of operation of the Directive on Saibaba Janata Sahakari Bank by three months beyond the close of business on January 22, 2024. According to a released statement, the RBI expressed satisfaction that the extension is deemed necessary in the public interest.
“The Reserve Bank of India is satisfied that in the public interest, it is necessary to further extend the period of operation of the Directive beyond the close of business on January 22, 2024,” the statement read.
Similarly, The National Co-operative Bank had received a directive dated July 24, 2023, initially for a period of six months up to the close of business on January 24, 2024. The RBI has now decided to further extend the period of operation of the Directive for an additional three months beyond the close of business on January 24, 2024. This extension is also subject to review.
This decision has been made in accordance with the powers vested in the Reserve Bank of India under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949. The RBI emphasized that the extension is a measure taken to safeguard public interest and maintain the stability of the cooperative banking sector.
The extended period for both banks, Saibaba Janata Sahakari Bank Limited and The National Co-operative Bank Ltd., will now last from the close of business on January 24, 2024, to the close of business on April 24, 2024, with a provision for further review. The RBI continues to closely monitor the situation to ensure the well-being of these financial institutions and the interests of the public.