The Reserve Bank of India (RBI) has placed several restrictions on the Baghat Urban Co-operative Bank Ltd., Solan under Section 35A read with Section 56 of the Banking Regulation Act, 1949, through a directive issued on October 6, 2025.
The directions took effect from the close of business on October 8, 2025, and will remain in force for six months, subject to review.
Under the restrictions, the bank cannot, without prior RBI approval, grant or renew loans, make new investments, incur liabilities, or accept fresh deposits. Withdrawals have been capped at Rs 10,000 per depositor, although the bank may set off loans against deposits as permitted. It can, however, incur essential expenses like salaries, rent, and electricity bills.
According to the RBI, the action follows the bank’s failure to address supervisory concerns despite earlier engagements. The move aims to safeguard depositors’ interests and ensure financial stability.
Eligible depositors will receive insurance coverage up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) after verification. The RBI clarified that these directions do not signify license cancellation, and the bank will continue limited operations under monitoring.
