The Reserve Bank of India (RBI) has imposed strict operational restrictions on Nagar Sahakari Bank Ltd, Etawah, Uttar Pradesh under Section 35A of the Banking Regulation Act due to serious supervisory concerns and deterioration in the bank’s functioning.
Under the directions effective from the close of business on May 18, 2026, the bank cannot grant or renew loans, make investments, accept fresh deposits, incur liabilities, or dispose of assets without prior RBI approval.
Depositors have been allowed withdrawals up to only Rs 10,000 per account, reflecting the bank’s stressed liquidity position.
RBI said it had engaged repeatedly with the bank’s Board and senior management to improve operations, but inadequate corrective efforts forced regulatory intervention to safeguard depositors’ interests.
The restrictions will remain in force for six months and are subject to review. RBI clarified that the bank’s licence has not been cancelled and banking operations will continue under the imposed restrictions. Eligible depositors can claim insurance cover up to Rs 5 lakh through DICGC.