Co-operative Banks

The Supreme Court holds RBI's power to supersede a multi-State co-operative bank's board runs for up to five years, not six months, and needs no state consultation.

The RBI has imposed penalties on several district central co-operative banks, including Nanded and Vijayapura, for lapses in PSL norms, capital adequacy, and governance. The 28 August 2025 orders highlight the regulator’s enforcement-driven approach and judicial deference to RBI discretion. For banking lawyers, the move signals stricter compliance expectations and reputational risks for clients in the co-operative sector.