The Reserve Bank of India (RBI) has imposed regulatory restrictions on Loknete R.D. (Appa) Kshirsagar Sahakari Bank Ltd, Niphad, Nashik district, under Section 35A read with Section 56 of the Banking Regulation Act, 1949, citing supervisory concerns.

As per an RBI directive dated December 15, 2025, the restrictions come into effect from the close of business on December 16, 2025. Under the directions, the bank cannot, without prior written approval of the RBI, grant or renew loans and advances, make investments, incur liabilities including borrowing funds or accepting fresh deposits, disburse payments, enter into compromises or arrangements, or sell or dispose of its assets, except as permitted under the RBI directive.

Considering the bank’s liquidity position, the RBI has also directed that no withdrawals shall be allowed from savings, current, or any other depositor accounts. However, the bank is permitted to set off loans against deposits subject to specified conditions. The bank may continue to incur expenditure on essential items such as employee salaries, rent, and electricity bills, as allowed under the directions.

The RBI said the restrictions have been imposed due to material supervisory concerns and are aimed at protecting the interests of depositors.

Eligible depositors will be entitled to receive deposit insurance claims up to ?5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as per applicable norms, upon submission of willingness and after due verification.

The central bank clarified that the issuance of these directions does not amount to cancellation of the bank’s licence. The bank will continue to conduct banking business subject to the restrictions until its financial position improves. The directions will remain in force for six months from December 16, 2025, and are subject to review.