The Reserve Bank of India (RBI) has imposed strict operational restrictions on The Gujarat Rajya Karmachari Co-operative Bank Ltd., Ahmedabad, under provisions of the Banking Regulation Act.

In a notification issued on March 11, 2026, the RBI said the bank will not be allowed to grant or renew loans and advances, make investments, incur liabilities, borrow funds, accept fresh deposits, or disburse payments without prior written approval from the central bank. The bank is also barred from entering into compromise settlements or selling and transferring assets, except as permitted under specific RBI directions.

Considering the bank’s current liquidity position, the RBI has directed it to suspend withdrawals from savings, current, or any other depositor accounts. However, the bank may adjust loans against deposits in line with the conditions specified by the regulator. It has been permitted to meet essential expenses such as employee salaries, rent, and electricity bills.

The RBI stated that it had previously engaged with the bank’s board and senior management to improve operations. However, due to insufficient corrective measures and concerns regarding depositor interests, the regulator decided to impose the restrictions.

Eligible depositors will be entitled to receive deposit insurance claims of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to verification and submission of required documents under the provisions of the DICGC Act, 1961.

The central bank clarified that the restrictions should not be interpreted as cancellation of the bank’s licence. The bank may continue limited banking operations under the specified conditions while the RBI monitors its financial position.

The directions will remain in effect for six months from the close of business on March 11, 2026, and are subject to review based on the bank’s performance and depositor interests.