The Reserve Bank of India (RBI) has imposed restrictions on Sri Mahatma Basaveshwar Co-operative Bank Ltd., Afzalpur, effective from the close of business on October 8, 2026, citing concerns over the bank’s liquidity position and depositor protection.

Under the directions issued on October 7, 2026, the bank cannot allow withdrawals from savings, current or other depositor accounts. It is also barred from granting or renewing loans, making investments, accepting fresh deposits or undertaking certain financial transactions without prior written approval from the RBI. The bank may, however, incur expenses for essential items such as employee salaries, rent and electricity bills, subject to the specified conditions.

Eligible depositors may claim deposit insurance of up to Rs. 5 lakh per depositor, in the same capacity and right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to applicable conditions and verification.

The RBI clarified that the restrictions do not amount to cancellation of the bank’s licence and that the bank can continue its banking operations subject to the imposed conditions. The directions will remain in force for six months from the close of business on October 8, 2026, and are subject to review.