**Executive Summary**
The Reserve Bank of India (RBI) issued directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949, to The Pusad Urban Cooperative Bank Ltd., Pusad, effective November 07, 2025, due to its deteriorating liquidity position. The directions restrict the bank's activities, including granting loans, accepting deposits, and disposing of assets without prior RBI approval. Depositors are allowed to withdraw up to ₹5,000 and may be eligible for deposit insurance up to ₹5,00,000 through the DICGC. The directions are valid for six months from November 07, 2025, and are subject to review.
**Key Points / Main Content**
* **Restrictions on Bank Operations:**
* The bank cannot grant or renew loans and advances without prior RBI approval.
* The bank cannot make investments or incur liabilities, including borrowing funds and accepting fresh deposits without prior RBI approval.
* The bank cannot disburse payments, enter into compromises, or dispose of assets without prior RBI approval.
* **Withdrawal Limit for Depositors:**
* Depositors can withdraw up to ₹5,000 from their savings, current, or other accounts.
* The bank can set off loans against deposits.
* **Bank Expenditures:**
* The bank may incur expenditure on essential items like salaries, rent, and electricity bills as specified in the RBI Directions.
* **Reason for Directions:**
* The directions are due to the bank's deteriorating liquidity position and a lack of concrete efforts to address the issue.
* **Deposit Insurance:**
* Eligible depositors can receive deposit insurance claims up to ₹5,00,000 from the DICGC, based on submission of willingness by the depositors concerned and after due verification.
* Depositors may contact bank officials for further information or visit the DICGC website (www.dicgc.org.in).
* **Ongoing Monitoring:**
* The issuance of these directions should not be construed as a cancellation of the banking license by the RBI.
* The bank will continue operations with the specified restrictions.
* The RBI will continue to monitor the bank's position and take actions as necessary.
* **Duration and Review:**
* These directions are effective for six months from the close of business on November 07, 2025, and are subject to review.
**Impact Analysis**
**Impact: The Pusad Urban Cooperative Bank Ltd.**
* **Impact:** The bank faces restrictions on its operations, impacting its ability to conduct business as usual. It needs to adhere to RBI's directions, which may include seeking approval for certain transactions and managing expenditures carefully.
* **Action Required:** The bank must display the RBI directive on its website/premises. The bank must contact the RBI for instructions when considering transactions.
**Impact: Depositors of The Pusad Urban Cooperative Bank Ltd.**
* **Impact:** Depositors are limited to withdrawing ₹5,000 and face potential uncertainty regarding the long-term viability of the bank. However, they are eligible for deposit insurance coverage up to ₹5,00,000.
* **Action Required:** Depositors should contact the bank or visit the DICGC website to understand the deposit insurance claim process and submit their willingness forms if eligible.
**Impact: Reserve Bank of India**
* **Impact:** The RBI must monitor the bank's position, address the situation, and issue modifications as necessary.
* **Action Required:** The RBI must continue to monitor the bank's position and take necessary actions including modifications of these Directions, as warranted, depending upon circumstances and in the interest of the depositors.
Key Entities Referenced
Banking Regulation Act, 1949: Governs banking activities in India.
Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking sector.
The Pusad Urban Cooperative Bank Ltd., Pusad: The specific cooperative bank to which directions are being issued.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Provides deposit insurance for bank accounts in India.
DICGC Act, 1961: The legislation governing the Deposit Insurance and Credit Guarantee Corporation.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
November 07, 2025
Directions under Section 35 A read with Section 56 of the Banking Regulation
Act, 1949 – The Pusad Urban Cooperative Bank Ltd., Pusad
It is hereby notified for information of the public that in exercise of powers vested
in it under sub section (1) of Section 35 A read with Section 56 of the Banking
Regulation Act, 1949, the Reserve Bank of India (RBI) vide Directive Ref. No.
NGP.DOS.SSM3.No.S611/5-04-166/2025-26 dated November 06, 2025, has issued
certain Directions to The Pusad Urban Cooperative Bank Ltd., Pusad (“the bank”)
whereby, as from the close of business on November 07, 2025, the bank shall not,
without prior approval of RBI in writing, grant or renew any loans and advances, make
any investment, incur any liability including borrowal of funds and acceptance of fresh
deposits, disburse or agree to disburse any payment whether in discharge of its
liabilities and obligations or otherwise, enter into any compromise or arrangement and
sell, transfer or otherwise dispose of any of its properties or assets except as notified
in the RBI Direction dated November 06, 2025, a copy of which has been directed to
be displayed on the bank's website / premises for perusal by interested members of
the public. Considering the bank's present liquidity position, the bank has been
directed to permit withdrawal of a sum not exceeding ₹5,000/- (Rupees Five
Thousand only) of the total balance held in savings bank or current accounts or any
other account of a depositor but is allowed to set off loans against deposits subject to
the conditions stated in the above RBI Directions. The bank may incur expenditure in
respect of certain essential items such as salaries of employees, rent, electricity bills,
etc., as specified in the said Directions.
2. The aforesaid Directions have been imposed on the bank on account of its
deteriorating liquidity position. RBI has in the recent past engaged with the Board and
Senior Management of the bank for improvement in its functioning. However, lack of
concrete efforts taken by the bank to address the liquidity issue and to protect the
interest of depositors of the bank, necessitated issuance of these Directions.
3. The eligible depositors would be entitled to receive deposit insurance claim amount
of their deposits upto a monetary ceiling of ₹5,00,000/- (Rupees Five Lakh only) in the
same capacity and in the same right, from the Deposit Insurance and Credit Guarantee
Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961,
based on submission of willingness by the depositors concerned and after due
verification. The depositors may contact the bank officials for further information.
Details may also be accessed on the DICGC website: www.dicgc.org.in.4. The issue of the above Directions by the RBI should not per se be construed as
cancellation of the banking license by RBI. The bank will continue to undertake
banking business subject to restrictions specified in the said Directions till its financial
position improves. The RBI continues to monitor the position of the bank and will take
necessary actions including modifications of these Directions, as warranted,
depending upon circumstances and in the interest of the depositors.
5. These Directions shall remain in force for a period of six months from the close of
business on November 07, 2025 and are subject to review.
(Brij Raj)
Press Release: 2025-2026/1472 Chief General Manager