The Reserve Bank of India has extended the directions it imposed on Sonpeth Nagari Sahakari Bank Maryadit, Sonpeth, District Parbhani, for a further three months. The restrictions, which were due to expire at the close of business on 30 October 2026, will now remain in force until the close of business on 30 January 2027, subject to review.
The extension was announced through RBI Press Release 2026-2027/1397, dated 28 October 2026. It is the second extension of a supervisory regime that began in July 2025, and it keeps the small Maharashtra urban co-operative bank under RBI directions for well over a year after the curbs were first imposed.
RBI's Section 35A directions on Sonpeth Nagari Sahakari Bank are extended three months — from close of business on 30 October 2026 to close of business on 30 January 2027, subject to review. All other terms and conditions of the directive remain unchanged.
What exactly has RBI done?
Acting under sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, RBI has extended the operation of its directive beyond 30 October 2026. The release records that RBI "is satisfied that in the public interest, it is necessary to further extend the period of operation of the Directive".
The operative part of the 28 October 2026 release is short and specific:
- New end date: close of business on 30 January 2027.
- Extension length: three months from close of business on 30 October 2026.
- Review clause: the extension is "subject to review", so RBI can revisit it before the new date.
- Other terms: "Other terms and conditions of the Directive under reference, shall remain unchanged."
- No clean chit: the release expressly states that the extension "should not per se be construed to imply that the Reserve Bank of India is satisfied with the financial position of the bank".
The release is signed by Brij Raj, Chief General Manager, and carries the number 2026-2027/1397.
How we got here: the timeline
In other words, a regime that began as a six-month intervention in July 2025 will, on the current timetable, run for eighteen months in total. Extensions of this kind are routine supervisory practice: RBI keeps a weak urban co-operative bank under directions while it works through its problems, rather than lifting curbs on a fixed date regardless of the bank's condition.
What were the original restrictions?
The 28 October 2026 release does not restate the operating restrictions — it simply says all other terms remain unchanged. The restrictions as originally imposed by the 29 July 2025 directive (Press Release 2025-2026/809) were:
- The bank could not, without RBI's prior written approval, grant or renew loans and advances, make investments, incur liabilities (including borrowings and acceptance of fresh deposits), disburse or agree to disburse any payment in discharge of its liabilities or otherwise, enter into any compromise or arrangement, or sell, transfer or otherwise dispose of its properties or assets — except as notified in the direction itself.
- Considering the bank's liquidity position, the bank was directed not to allow withdrawal of any amount from savings bank, current or any other account of a depositor, but was allowed to set off loans against deposits, subject to the conditions in the directions.
- The bank could incur expenditure on certain essential items — such as salaries of employees, rent and electricity bills — as specified in the directions.
- A copy of the direction was directed to be displayed on the bank's website and premises for the public to peruse.
Why were the directions imposed at all? The July 2025 release records that RBI had engaged with the bank's Board and senior management for improvement in its functioning, but "lack of concrete efforts taken by the bank to address the supervisory concerns and to protect the interest of depositors" made the directions necessary.
What this does — and does not — mean
It is not a cancellation of the bank's licence. The July 2025 release stated expressly that issuing the directions "should not per se be construed as cancellation of the banking license by RBI", and that the bank would continue to undertake banking business subject to the restrictions until its financial position improved. RBI also said it continues to monitor the bank's position and will take necessary actions, including modifying the directions, as warranted.
It is not a verdict that the bank is now sound. The 28 October 2026 release repeats the standard caution in terms: the extension must not be read as implying RBI is satisfied with the bank's financial position. An extension means supervision continues; it is neither a clean chit nor a closure order.
It does not change the deposit-insurance position stated in July 2025. The original release noted that eligible depositors would be entitled to receive deposit insurance claim amounts of up to ₹5,00,000 (₹5 lakh) in the same capacity and in the same right from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification. Depositors were advised to contact bank officials for further information, with details also available on the DICGC website. That statement was part of the original July 2025 release; the 28 October 2026 extension does not announce any change to it.
Who is affected?
- Depositors of Sonpeth Nagari Sahakari Bank — account holders in Sonpeth, District Parbhani, Maharashtra, and any other branch of the bank. The practical question for them is what withdrawals and payments the bank can currently make under the extended directive; the answer sits in the directive copy displayed at the bank.
- Borrowers — the original directions restricted fresh lending and renewals without RBI's prior written approval, and permitted set-off of loans against deposits subject to conditions.
- Other urban co-operative banks — not directly affected. Section 35A directions are bank-specific supervisory actions; this extension changes nothing for any other bank. It is, however, another reminder of how long RBI directions can run: eighteen months and counting for this bank.
- Students and practitioners tracking UCB supervision — the case is a clean illustration of the Section 35A extension pattern: initial six-month directions, followed by successive three- or six-month extensions, each expressly "subject to review".
What should depositors and stakeholders do next?
- Read the directive itself. RBI directed that a copy be displayed on the bank's website and premises. That document — not news summaries — states the current restrictions.
- Contact bank officials for account-specific questions, including the DICGC claim process. The July 2025 release expressly pointed depositors to bank officials for further information.
- Do not assume the curbs end on 30 January 2027. The extension is "subject to review": RBI may extend again, modify the terms, or lift the directions depending on the bank's position.
- Watch for the next RBI release. Any further extension, modification or lifting will come as a fresh RBI press release; this article will be updated if RBI acts again.
Old vs new at a glance
Frequently asked questions
Q: Till when are RBI's directions on Sonpeth Nagari Sahakari Bank now in force?
A: Till the close of business on 30 January 2027, subject to review. The previous expiry was close of business on 30 October 2026.
Q: Has RBI cancelled the bank's licence?
A: No. The July 2025 release expressly said the directions should not be construed as cancellation of the banking licence, and the 28 October 2026 extension announces no cancellation.
Q: Does the extension mean the bank's finances have improved?
A: No. RBI expressly states the extension should not per se be construed to imply it is satisfied with the bank's financial position.
Q: Can depositors withdraw money now?
A: The 28 October 2026 release does not restate withdrawal terms and says all other terms remain unchanged. The original July 2025 directions barred withdrawals of any amount from deposit accounts (with set-off of loans against deposits permitted subject to conditions). Confirm the current position from the directive copy at the bank or from bank officials before acting.
Q: What is the DICGC cover for depositors?
A: The July 2025 release noted eligible depositors could claim up to ₹5,00,000 per depositor in the same capacity and same right from DICGC, after submitting willingness and due verification. Contact bank officials for the claim process.
Q: Under what law did RBI act?
A: Section 35A read with Section 56 of the Banking Regulation Act, 1949 — the provision under which RBI issues directions to banking companies, applied to co-operative banks through Section 56.
Q: Could the directions be extended again after 30 January 2027?
A: Yes. The extension is "subject to review", and the history of this bank — July 2025, July 2026, October 2026 — shows successive extensions. Any further step will come through a fresh RBI release.
Sources
- Primary source: RBI Press Release 2026-2027/1397, "Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Sonpeth Nagari Sahakari Bank Maryadit, Sonpeth, Dist. Parbhani – Extension of Period", 28 October 2026 — rbi.org.in.
- Background: RBI Press Release 2025-2026/809, original directions dated 29 July 2025 — rbi.org.in.
This article is a verified summary of the RBI releases linked above. It is not legal or financial advice. Depositors should confirm account-specific positions with the bank.
