**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 Valsad Mahila Nagrik Sahakari Bank Ltd., Valsad, Gujarat, effective December 18, 2025. These directions restrict the bank's operations due to supervisory concerns and are intended to protect the interests of depositors. The Directions are effective for six months and are subject to review.
**Key Points / Main Content**
* **Restrictions on Banking Operations:**
* The bank cannot grant or renew loans and advances, make any investment, incur liabilities (including borrowing funds and accepting fresh deposits), disburse payments, enter compromises, or sell/transfer assets without prior written RBI approval.
* Withdrawals from any depositor account are disallowed, but the bank can set off loans against deposits.
* The bank may incur expenditure on essential items like employee salaries, rent, and electricity bills.
* **Reasons for Directions:**
* The Directions are due to supervisory concerns and to protect depositors' interests.
* The RBI engaged with the bank's board for improvements, but concrete actions were lacking.
* **Deposit Insurance:**
* Eligible depositors can claim up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to DICGC Act, 1961 provisions.
* Claims require depositor willingness and verification, with details available on www.dicgc.org.in.
* **Banking License and Monitoring:**
* The Directions are not a cancellation of the bank's license. The bank will continue business with the specified restrictions.
* The RBI will monitor the bank's position and take actions, including modifying Directions.
* **Duration and Review:**
* The Directions are effective for six months from December 18, 2025, and are subject to review.
**Impact Analysis**
**Stakeholder: The Valsad Mahila Nagrik Sahakari Bank Ltd.**
* **Impact:** Limited operational capabilities, including restrictions on lending, investments, and disbursing payments.
* **Action Required:** Comply with the Directions, address supervisory concerns, and improve financial position.
**Stakeholder: Depositors of The Valsad Mahila Nagrik Sahakari Bank Ltd.**
* **Impact:** Restricted access to deposited funds, but eligible depositors are entitled to deposit insurance up to ₹5,00,000.
* **Action Required:** Submit willingness for deposit insurance claims and contact bank officials for information.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** Continued monitoring of the bank's financial position.
* **Action Required:** Monitor the bank's compliance with the Directions and take further necessary actions as warranted.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator issuing the directions to the specified bank.
Banking Regulation Act, 1949: The Act under which the directions are issued, specifically referencing Sections 35 A and 56.
The Valsad Mahila Nagrik Sahakari Bank Ltd., Valsad, Gujarat: The specific bank to which the directions apply.
DICGC Act, 1961: Governs deposit insurance claims.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Provides deposit insurance; depositors can claim up to a monetary ceiling of ₹5,00,000/-.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
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
December 18, 2025
Directions under Section 35 A read with Section 56 of the Banking Regulation
Act, 1949 – The Valsad Mahila Nagrik Sahakari Bank Ltd., Valsad, Gujarat
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.
AMD.DOS.SSM.No.S831/11-03-153/2025-2026 dated December 17, 2025 has issued
certain Directions to The Valsad Mahila Nagrik Sahakari Bank Ltd., Valsad,
Gujarat, (“the bank”), whereby, as from the close of business on December 18, 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 December 17, 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 not to allow withdrawal of any amount from 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. These Directions are necessitated due to supervisory concerns emanating from the
recent material developments in the bank, and to protect the interests of depositors of
the bank. 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 supervisory concerns 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 financialposition 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 December 18, 2025 and are subject to review.
(Brij Raj)
Press Release: 2025-2026/1733 Chief General Manager