**Executive Summary**
This press release from the Reserve Bank of India (RBI), dated November 07, 2025, announces directions issued to The Pusad Urban Cooperative Bank Ltd., Pusad, under Section 35 A read with Section 56 of the Banking Regulation Act, 1949. The directions, effective November 07, 2025, impose restrictions on the bank's operations due to its deteriorating liquidity position. These directions will remain in force for six months and are subject to review.
**Key Points / Main Content**
* **Restrictions on Bank Operations:**
* The bank is prohibited from granting or renewing loans and advances, making investments, incurring liabilities (including borrowing funds and accepting fresh deposits), disbursing payments, entering into compromises, or disposing of properties/assets without prior written approval from the RBI.
* **Withdrawal Limit:**
* Depositors are allowed to withdraw a maximum of ₹5,000 from their savings, current, or any other account.
* The bank is permitted to set off loans against deposits, subject to conditions stated in the RBI Directions.
* **Permitted Expenditures:**
* The bank can incur expenditures for essential items like employee salaries, rent, and electricity bills, as specified in the Directions.
* **Reason for Directions:**
* The Directions are imposed due to the bank's deteriorating liquidity position.
* Despite engagement with the RBI, the bank has not taken adequate steps to address the issue.
* **Deposit Insurance:**
* Eligible depositors are entitled to receive deposit insurance up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to willingness and verification.
* Depositors can contact the bank or visit www.dicgc.org.in for details.
* **Status of Banking License:**
* The issuance of these directions should not be construed as cancellation of the banking license. The bank will continue banking operations subject to the specified restrictions.
* RBI will monitor the bank's financial position and take further actions as necessary.
* **Duration and Review:**
* The Directions are effective for six months from November 07, 2025, and are subject to review.
**Impact Analysis**
**The Pusad Urban Cooperative Bank Ltd., Pusad**
* **Impact**
* Significantly restricted in its ability to conduct normal banking operations, including lending, investment, and deposit acceptance.
* Subject to increased scrutiny and potential further actions by the RBI.
* **Action Required**
* Adhere strictly to the directions issued by the RBI.
* Display the RBI Direction on the bank's website/premises.
* Address the deteriorating liquidity position and improve its financial standing.
**Depositors of The Pusad Urban Cooperative Bank Ltd., Pusad**
* **Impact**
* Restricted access to their funds, with a withdrawal limit of ₹5,000.
* Eligible for deposit insurance up to ₹5,00,000 through the DICGC.
* **Action Required**
* Be aware of the withdrawal limitations.
* If eligible, submit willingness for deposit insurance claims to DICGC.
* Contact the bank for more information about deposit insurance claims.
Key Entities Referenced
Banking Regulation Act, 1949: Indian law that regulates all banking firms in India.
Reserve Bank of India (RBI): India's central bank, regulator of Indian banking system.
The Pusad Urban Cooperative Bank Ltd., Pusad: The bank subject to the Directions issued by RBI.
Section 35 A: Section of the Banking Regulation Act, 1949, conferring powers on RBI to issue directions to banking companies.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Provides insurance coverage to bank deposits.
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