Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – The Suri Friends’ Union Co-operative Bank Ltd., Suri, West Bengal – Extension of period

The original directive of 21 July 2022 has been rolled forward repeatedly, with the current extension running to close of business on 22 October. Continued extension signals that the regulator is not yet satisfied that the bank's financial position, asset quality or governance has stabilised sufficiently to lift restrictions. What this means for compliance teams: the bank remains in a constrained operating state, typically involving limits on deposit withdrawal or acceptance, restrictions on fresh lending and investment, and closer RBI oversight of board decisions.

Any bank or counterparty transacting with the institution should treat it as a heightened-risk relationship and review exposure accordingly. Actions needed: (1) the bank's management should maintain a documented remediation plan with measurable milestones and evidence of progress to the supervisor; (2) keep depositor communications clear, factual and consistent with the applicable restrictions; (3) apply enhanced monitoring to liquidity, NPA recognition and provisioning; (4) counterparties and correspondent banks should refresh credit and settlement risk assessments, and confirm DICGC deposit insurance coverage limits where relevant. Wider read-across: the extension is institution-specific but reinforces the RBI's continuing focus on governance and financial soundness in the co-operative banking segment.

Boards of other co-operative and small finance institutions should use it as a prompt to test their own capital, asset quality and disclosure controls.