In a major action to safeguard depositors, the Reserve Bank of India has imposed strict restrictions on Motiram Agrawal Jalna Merchants Co-operative Bank Limited under the Banking Regulation Act, 1949.
Effective April 10, 2026, the bank has been barred from issuing new loans, accepting fresh deposits, making investments, or disbursing payments without prior RBI approval. Notably, depositors are not allowed to withdraw any amount from their accounts due to severe liquidity stress.
The RBI clarified that the action was necessitated by a shortfall in liquid assets and the bank’s failure to take adequate corrective measures despite prior engagement with regulators.
However, relief comes in the form of deposit insurance. Eligible customers can claim up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation, subject to verification.
The central bank emphasized that the bank’s license has not been cancelled, and it may continue limited operations under restrictions. The directions will remain in force for six months, with RBI closely monitoring the situation.
