Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Motiram Agrawal Jalna Merchants Co-operative Bank Ltd, Jalna – Extension of Period

The original directive was dated 10 April 2026. Section 35A read with Section 56 of the Banking Regulation Act, 1949 allows the RBI to issue directions to co-operative banks in the public interest or to prevent affairs being conducted in a manner detrimental to depositors. For UK and international financial services executives, the direct prudential impact is limited to those with exposure to this institution or the Indian co-operative banking sector.

However, it reinforces the RBI's active use of supervisory powers over smaller co-operative banks, particularly around governance, liquidity, asset quality and depositor protection. Compliance teams should: (1) confirm whether the firm has any direct or indirect counterparty exposure to the bank; (2) review Indian co-operative bank exposures in credit, treasury and correspondent banking books; (3) monitor RBI press releases for further extensions or withdrawal of directions; and (4) ensure risk registers capture regulatory-driven counterparty restrictions. There is no direct UK regulatory action required.

The extension is a reminder that jurisdictional supervisory actions can affect cross-border counterparty risk and should be incorporated into emerging risk dashboards. For firms with Indian operations, local compliance teams should verify whether any customer or client relationships are impacted. Overall, this is an informational supervisory development with low direct urgency for most regulated firms, but medium relevance for those with Indian co-operative bank exposure.