The Reserve Bank of India (RBI) has imposed regulatory restrictions on Urban Co-operative Bank Ltd., Dehradun by issuing Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, citing supervisory concerns and recent material developments in the bank.
As per RBI Directive dated February 9, 2026, the restrictions came into effect from the close of business on February 10, 2026. Under these Directions, the bank is prohibited from granting or renewing loans and advances, making investments, incurring liabilities including borrowings, accepting fresh deposits, or disposing of assets without prior written approval of the RBI.
Withdrawals from savings, current or any other depositor accounts have also been disallowed, considering the bank’s present liquidity position. However, the bank is permitted to set off loans against deposits and meet essential expenses such as staff salaries, rent and electricity bills, as specified.
RBI clarified that these Directions are aimed at protecting depositor interests and do not amount to cancellation of the bank’s licence. Eligible depositors are entitled to deposit insurance up to Rs 5 lakh from DICGC, subject to verification. The Directions will remain in force for six months and are subject to review.