The Reserve Bank of India has placed strict restrictions on Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Ltd., Nashik, effective July 17, 2026. The RBI co-operative bank restrictions were issued under Section 35A of the Banking Regulation Act, 1949. These directions aim to protect depositors amid serious supervisory concerns.
Key Restrictions on the Bank
As a result of these directions, the bank cannot grant or renew loans, accept fresh deposits, or make new investments without RBI’s written approval. Additionally, it cannot sell or transfer any assets or enter into any compromise without prior permission. However, the bank may continue paying salaries, rent, and essential utility bills as specified.
Considering the bank’s current liquidity position, depositors can withdraw up to ₹1,00,000 (one lakh rupees) from their savings, current, or other accounts. The bank may also set off loans against deposits, subject to conditions outlined in the RBI directive dated July 16, 2026. These limits apply immediately from the close of business on July 17, 2026.
What This Means for Depositors
Eligible depositors can claim deposit insurance of up to ₹5,00,000 (five lakh rupees) through the Deposit Insurance and Credit Guarantee Corporation (DICGC). Therefore, most small depositors remain protected under the DICGC Act, 1961. Depositors must submit their willingness to claim and complete verification to receive this amount.
For further details, depositors should contact bank officials directly. Meanwhile, additional information is available on the DICGC website at www.dicgc.org.in. The RBI co-operative bank restrictions do not amount to a cancellation of the bank’s licence.
RBI Continues to Monitor the Situation
The bank will continue operating under these restrictions until its financial position improves. The RBI will actively monitor developments and may modify the directions as circumstances require. These measures are valid for six months from July 17, 2026, and are subject to review.
For example, if the bank’s financial health improves, the RBI could ease some restrictions earlier. The central bank has made clear that depositor protection remains its top priority throughout this process. Full details of the directive are available on the bank’s premises and website.
Source: RBI Press Releases
