Kanaka Pattana Sahakara Bank Niyamita, Davangere

RBI issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Kanaka Pattana Sahakara Bank Niyamita, Davangere. The bank may not, without prior written approval of RBI, grant or renew loans and advances, make investments, incur liabilities including borrowings and acceptance of fresh deposits, disburse payments, or enter into compromises/arrangements or dispose of assets except as permitted in the directive. In view of the bank's liquidity position, withdrawals from savings, current or other depositor accounts are prohibited, though limited set-off of loans against deposits and certain essential expenditures are permitted. RBI said it had engaged with the board and senior management earlier, but the bank had not taken concrete steps to address supervisory concerns and protect depositors' interests.

The bank remains operational but under tight restrictions from the close of business on March 12, 2026 for six months unless reviewed earlier. Depositors cannot freely withdraw funds, lending and deposit-taking are curtailed, and the bank can only conduct limited activities allowed by RBI, with monitoring continuing and possible modification later.