The Reserve Bank of India (RBI) has imposed regulatory restrictions on two cooperative banks, The U.P. Civil Secretariat Primary Cooperative Bank Limited in Lucknow and The Gujarat Rajya Karmachari Co-op. Bank Ltd. in Ahmedabad, under Section 35A read with Section 56 of the Banking Regulation Act, 1949.
According to RBI directives issued on March 11, 2026, both banks will not be allowed to grant or renew loans, make investments, incur liabilities, or accept fresh deposits without prior approval from the central bank.
The restrictions also prohibit the banks from making payments or allowing withdrawals from savings, current, or other depositor accounts due to their present liquidity positions. However, the banks may meet essential expenses such as employee salaries, rent, and electricity bills.
The RBI said it had previously engaged with the banks’ boards and management to improve operations, but inadequate corrective action and unresolved supervisory concerns prompted the move to safeguard depositors’ interests.
Depositors are eligible for insurance coverage of up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation under the DICGC Act, 1961.
The directions will remain in force for six months and may be reviewed depending on the banks’ financial conditions.