The Reserve Bank of India (RBI) has imposed restrictions on Desaiganj Nagari Cooperative Bank Maryadit, Desaiganj, citing concerns over the bank’s liquidity position and supervisory issues.

Effective from the close of business on August 27, 2026, the bank has been barred from allowing withdrawals from savings, current or other depositor accounts without prior written approval from the RBI. The bank has also been restricted from granting or renewing loans, making investments, accepting fresh deposits, borrowing funds or disposing of its assets, except as specifically permitted under the RBI’s directions.

The bank may continue to incur essential expenses, including employee salaries, rent and electricity bills. It may also set off loans against deposits, subject to the conditions specified by the RBI.

The RBI said it had previously engaged with the bank’s board and senior management to address concerns regarding its functioning. However, inadequate concrete efforts to resolve the supervisory concerns and protect depositors’ interests led to the imposition of the restrictions.

Eligible depositors will be entitled to deposit insurance of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to applicable conditions, verification and submission of willingness.

The RBI clarified that the directions do not amount to cancellation of the bank’s banking licence. The bank can continue its banking business subject to the imposed restrictions, while the RBI will monitor its financial position and may modify the directions as warranted.

The restrictions will remain in force for six months from the close of business on August 27, 2026, subject to review.