The Reserve Bank of India (RBI) has imposed operational restrictions on Puducherry Co-operative Urban Bank Ltd., allowing depositors to withdraw only up to Rs 5,000 from their savings, current or other accounts.
The restrictions, issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, came into effect from the close of business on October 21, 2026, and will remain in force for six months, subject to review.
Under the directions, the bank cannot grant or renew loans, make investments, accept fresh deposits, borrow funds or make payments without prior written approval from the RBI, except for specifically permitted activities. Essential expenditure, including employee salaries, rent and electricity bills, is allowed.
The RBI said its supervisory engagement with the bank’s Board and senior management had not resulted in concrete efforts to address concerns and protect depositors’ interests.
Eligible depositors can claim insurance coverage of up to Rs 5 lakh from DICGC, subject to applicable conditions and verification.
The RBI clarified that the restrictions do not amount to cancellation of the bank’s licence and that it will continue monitoring its financial position.
