Recorded RBI impact
Business restriction
Business restriction · Fresh imposition
Published by RBI
27 Aug 2026
Case Brief
RBI has issued fresh Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj. Effective from the close of business on August 27, 2026, the bank must not, without prior RBI approval, grant or renew loans and advances, make investments, incur liabilities including acceptance of fresh deposits and borrowings, make payments, enter compromises or arrangements, or dispose of assets except as permitted. Depositors are also barred from withdrawing money from savings, current, or other accounts, though limited set-off of loans against deposits and certain essential expenditures are allowed under the directions. RBI said the action followed supervisory engagement and the bank's lack of concrete efforts to address concerns and protect depositors, and noted the bank will continue banking business only subject to these restrictions for six months, subject to review.
Why RBI Acted
RBI issued directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj. The bank cannot, without prior RBI approval, grant or renew loans and advances, make investments, incur liabilities including fresh deposits/borrowings, disburse payments, enter compromises/arrangements, or sell/transfer/dispose of assets except as specifically allowed. It is also directed not to allow withdrawals from savings, current or other depositor accounts, subject to limited set-off and essential expenditure permissions. RBI stated that the action was necessitated by the bank's present liquidity position and its failure to take concrete efforts to address supervisory concerns and protect depositors' interests. The directions are for six months from close of business on August 27, 2026, subject to review.
Operating Impact
The bank’s day-to-day business is severely constrained for six months, pending RBI review. Borrowers cannot expect fresh or renewed lending, depositors cannot freely withdraw funds except as permitted, and the bank can only undertake limited essential and RBI-approved transactions.
Regulatory Basis
- Section 35 A read with Section 56 of the Banking Regulation Act, 1949
- DICGC Act, 1961
Action Facts
- Primary Impact
- Business restriction
- Order Date
- 25 Aug 2026
- Effective From
- 27 Aug 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank