Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Urban Co-operative Bank Limited, Dehradun - Extension of Period

the RBI has again extended its Section 35A read with Section 56 directions on Urban Co-operative Bank Limited, Dehradun, a small urban co-operative bank, confirming that the supervisory restrictions first imposed in early 2026 remain in place beyond the previously notified 10 August 2026 expiry and will run for a further defined period. For most UK and international financial services executives this is a single-institution Indian supervisory action with no direct prudential read-across; it is nonetheless a useful signal of the RBI's continued willingness to keep co-operative banks under extended restriction rather than permit a rapid exit, and of the operational friction this creates for counterparties. Compliance teams with any Indian correspondent, deposit, trade finance or interbank exposure to small co-operative banks should treat the extension as a trigger event: confirm whether the bank appears in current exposure, nostro/vostro or counterparty lists, verify that any limits reflect the restricted operating status, and check that onboarding and periodic review files capture the latest directive references.

Treasury and liquidity functions should assess any concentration to the institution, while relationship managers should be alert to deposit migration from affected co-operative banks into larger or more highly rated institutions. There is no new obligation on firms outside the affected entity, and no change to the UK or EU rulebook. Actions needed: refresh counterparty watchlists, log the directive and renewed expiry in regulatory-change registers, brief front-office teams handling any exposure, and monitor for further RBI notices on the same institution.