The Reserve Bank of India (RBI) has imposed restrictions on Desaiganj Nagari Cooperative Bank for six months, prohibiting it from granting or renewing loans without prior approval. The bank is also barred from accepting fresh deposits and cannot withdraw funds from savings or current accounts.
On August 25, 2026, the Reserve Bank of India (RBI) issued a set of Directions to Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj due to its poor liquidity position and failure to address supervisory concerns. The restrictions, effective from August 27, 2026, prohibit the bank from granting or renewing any loans, making investments, incurring liabilities, including borrowal of funds, accepting fresh deposits, disbursing payments, entering into compromises or arrangements, and selling, transferring, or disposing of properties or assets without prior RBI approval.
Considering the bank's present liquidity position, it has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor. However, the bank may set off loans against deposits under specified conditions mentioned in the RBI Directions. The bank is allowed to incur expenditure for essential items such as salaries, rent, and electricity bills, as per the Directions.
The RBI has engaged with the Bank's Board and Senior Management for improvement in its functioning. The lack of concrete efforts taken by the bank necessitated these restrictions. Eligible depositors would be entitled to receive deposit insurance claim amounts up to ₹5,00,000/- (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961.
These Directions shall remain in force for a period of six months from the close of business on August 27, 2026 and are subject to review.
Source:
Reserve Bank of India
