The Reserve Bank of India (RBI) has placed The Valsad Mahila Nagrik Sahakari Bank Ltd., Valsad, Gujarat, under Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, due to supervisory concerns. The Directions, issued on December 17, 2025, will be effective from the close of business on December 18, 2025.
Under the restrictions, the bank cannot grant or renew loans, make investments, incur liabilities, accept fresh deposits, or dispose of assets without prior RBI approval. Considering the bank’s liquidity position, withdrawals from savings, current, and other depositor accounts have been prohibited, though set-off of loans against deposits is permitted as per conditions. The bank may, however, incur expenditure on essential items such as salaries, rent, and electricity bills.
The RBI said the action was necessary as the bank failed to address supervisory concerns despite earlier engagement. Eligible depositors will be entitled to deposit insurance up to Rs 5 lakh from DICGC. The Directions will remain in force for six months and are subject to review.