The Tiruvalla Urban Co-operative Bank Ltd., Tiruvalla, Pathanamthitta

RBI issued Directions to The Tiruvalla Urban Co-operative Bank Ltd. under Section 35A read with Section 56 of the Banking Regulation Act, 1949, effective from the close of business on October 08, 2026. The bank was prohibited, without prior RBI approval, from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and acceptance of fresh deposits, disbursing or agreeing to disburse payments, entering into compromises or arrangements, and selling or transferring assets except as permitted in the Direction. RBI also directed the bank not to allow withdrawal of any amount from savings/current/other depositor accounts, while permitting only limited set-off of loans against deposits and certain essential expenditure. RBI said the Directions were necessitated by supervisory concerns, lack of concrete efforts by the bank to improve functioning, and the need to protect depositors' interests.

The bank must operate under tight RBI-imposed restrictions for six months, with no fresh lending, deposit-taking, or normal depositor withdrawals except for specified exceptions. Depositors are directly affected by the withdrawal freeze, though eligible depositors may claim deposit insurance up to ₹5 lakh subject to DICGC rules.