The Reserve Bank of India (RBI) has imposed strict business restrictions on Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj, citing concerns over the bank’s liquidity position and failure to adequately address supervisory concerns.
Effective from the close of business on August 27, 2026, the bank cannot, without prior written approval from RBI, grant or renew loans, make investments, incur liabilities, accept fresh deposits, make payments, enter into compromises or dispose of assets, except as specifically permitted under the RBI directions.
Most significantly, depositors have been barred from withdrawing money from savings, current or other accounts. However, the bank may set off loans against deposits, subject to RBI conditions. Essential expenses such as employee salaries, rent and electricity bills may continue.
RBI said it had engaged with the bank’s Board and senior management earlier, but the lack of concrete corrective measures led to the restrictions.
Eligible depositors can claim deposit insurance of up to Rs 5 lakh from DICGC, subject to applicable rules and verification.
The directions will remain in force for six months from August 27, 2026, and are subject to review. RBI clarified that the restrictions do not amount to cancellation of the bank’s licence.
