The Union Government informed the Lok Sabha on Monday that the Reserve Bank of India (RBI) has extended operational restrictions on the Bhagat Urban Co-operative Bank Ltd., Solan till October 8, 2026, while the Himachal Pradesh Registrar of Cooperative Societies (RCS) has suspended the bank’s Board for failing to improve its financial position.
In a written reply, Union Minister of State for Finance Pankaj Chaudhary said RBI had imposed the restrictions in October 2025 to safeguard depositors’ interests. The bank cannot grant fresh loans, accept new deposits or undertake major financial transactions without prior RBI approval. Depositors are presently permitted to withdraw up to Rs 10,000 each.
As of October 8, 2025, the bank had 70,849 depositors with deposits of Rs 467.46 crore, while 10,590 shareholders were affected by the restrictions. Its Gross NPAs stood at Rs 116.19 crore (52.45%) as on July 9, 2026.
The Minister said no proposal has been received for the bank’s voluntary amalgamation with a stronger cooperative bank.
He added that all 70,849 depositors are covered under DICGC. So far, 12,653 depositors have received insurance payouts totalling Rs 191.57 crore, while claims worth Rs 102.28 crore remain pending for settlement.
The reply further stated that, after repeated failures by the Board to meet RBI-prescribed corrective targets despite several directions and review meetings, the Himachal Pradesh RCS suspended the Board on June 19, 2026, and appointed three state government officials as Administrators to manage the bank’s affairs.
