#RBI Powers

The Supreme Court held that RBI's supersession power under Section 36AAA BR Act for multi-State co-op banks is not subject to Article 243ZL's six-month cap, allowing up to five years aggregate. It also ruled that consultation with State Government is not required for multi-State banks, unlike single-State societies.

The Kerala High Court has ruled that the Reserve Bank of India cannot supersede a co-operative bank’s board under Section 36AAA without first consulting the state government, making state consultation a mandatory procedural step. This decision strengthens the federal structure of co-operative banking regulation and protects state-level oversight, directly impacting RBI’s regulatory autonomy and co-operative banks’ governance across India.