RBI Withdraws Directions Issued To Sikar Urban Co‑operative Bank

The Reserve Bank of India (RBI) has withdrawn the Directions previously imposed on Sikar Urban Co‑operative Bank Ltd, Sikar. The Directions were originally issued on October 26, 2018, for six months and had been modified and extended several times, most recently until March 09, 2026.

The withdrawal follows a review of the bank’s financial position. RBI stated that it was satisfied that lifting the restrictions was necessary in the public interest. The withdrawal became effective from the close of business on February 04, 2026.

RBI’s Original Directive and Its Extensions

RBI first issued Directions to Sikar Urban Co‑operative Bank Ltd under Section 35A read with Section 56 of the Banking Regulation Act, 1949. These restrictions were imposed via Directive No. DCBS.CO.BSD‑I/D‑2/12.27.215/2018‑19 dated October 26, 2018.

The Directions were initially valid for six months and were intended to address concerns regarding the bank’s operational and financial health. Over the years, RBI reviewed the bank’s situation periodically and extended the Directions several times.

Regulatory Review and Grounds for Withdrawal

RBI conducted a fresh assessment of the financial position of Sikar Urban Co‑operative Bank as part of its supervisory process. After reviewing available data, the central bank concluded that withdrawing the Directions was appropriate.

The withdrawal was executed under powers granted to RBI under Section 35A(2) read with Section 56 of the Banking Regulation Act, 1949. RBI noted that the action was taken in the public interest, indicating improvements in the bank’s financial or compliance status.

Implications For Sikar Urban Co‑operative Bank

The withdrawal of Directions allows the bank to resume normal operations without the regulatory constraints that had been in place since 2018. Such Directions typically restrict activities, including lending, accepting fresh deposits, or other operational aspects depending on severity.

With these removed, the bank may now operate under standard regulatory norms applicable to urban co‑operative banks. The improved status may also help restore customer confidence and support the smoother functioning of financial services in the region.

Regulatory Oversight and Future Compliance

Although the Directions have been withdrawn, the bank remains subject to ongoing supervision under the Banking Regulation Act. RBI’s decision suggests that the bank has addressed key concerns identified over the past years.

Continued compliance with prudential norms, reporting standards, and governance expectations will remain essential. The withdrawal indicates that the bank’s financial position met RBI’s criteria at this stage, but future oversight will continue to ensure stability.

Conclusion

RBI’s withdrawal of Directions marks a significant regulatory milestone for Sikar Urban Co‑operative Bank. The action ends more than seven years of restrictions imposed to safeguard depositor interests and ensure financial stability.

With operations now reverting to normal regulatory conditions, the bank can focus on restoring its service capabilities. The development reflects RBI’s assessment that the bank’s financial position has improved sufficiently to lift the earlier measures.

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