Supreme Court Upholds RBI's Power to Supersede Multi-State Co-operative Bank Boards Beyond Six-Month Constitutional Limit

Case Snapshot

• Case Name: Sandeep S. Ghandat & Ors. v. Reserve Bank of India & Ors.

• Citation: 2026 INSC 955

• Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe

• Date of Judgment: September 3, 2026

• Area of Law: Banking Law, Constitutional Law, Co-operative Societies, Regulatory Powers

The Judgment in One Line

Supreme Court holds RBI's power to supersede multi-state co-operative bank boards under Section 36AAA of BR Act is not limited by Article 243ZL's six-month cap.

Why This Judgment Matters

This judgment resolves the constitutional conflict between democratic governance of co-operative societies under Part IXB and RBI's regulatory powers over co-operative banks. It establishes that the Banking Regulation Act applies to multi-state co-operative banks through the third proviso to Article 243ZL(1), effectively incorporating BR Act provisions into the constitutional framework. The ruling prioritizes depositor protection and financial stability over rigid six-month timelines, affirming RBI's authority to extend supersession up to five years. A significant victory for banking regulation.

Background

Abhyudaya Co-operative Bank, originally registered under Maharashtra law, became a multi-state co-operative bank after amalgamation. In November 2023, RBI superseded its Board under Section 36AAA of the Banking Regulation Act, 1949, appointing an Administrator. The Board's statutory term was to exp

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