New Delhi, May 18: The Reserve Bank of India (RBI) has imposed several restrictions on the Itawa Urban Cooperative Bank Limited located in Uttar Pradesh. In a directive issued on Monday, the central bank stated that the bank will not be permitted to issue any new loans, renew existing loans, or make new investments without prior written approval from the RBI.
According to the RBI’s instructions, the bank is also prohibited from incurring any liabilities, which includes borrowing funds and accepting new deposits. Furthermore, the bank will not be able to sell, transfer, or dispose of any of its assets, except as permitted under the directives issued by the RBI on May 15, 2026.
Given the bank’s current liquidity situation, account holders are allowed to withdraw a maximum of ₹10,000 from their savings, current, or other accounts. However, the bank may adjust loans against deposits under specified conditions.
The bank is permitted to spend on essential services such as employee salaries, rent, and electricity bills.
The RBI stated that this action was taken to protect the interests of depositors in light of recent developments and serious concerns regarding the bank’s operations. The central bank mentioned that it had been in continuous dialogue with the bank’s board and senior management regarding improvements in banking operations, but no substantial corrective measures were taken by the bank.
Additionally, the RBI clarified that eligible depositors would be able to receive deposit insurance coverage of up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation, provided they give their consent and complete the verification process.
Customers of the bank have been advised to contact bank officials for further information. These RBI directives will remain in effect for six months following the closure of business on May 18, although changes may be made after a review of the situation.
Meanwhile, the RBI has also imposed a fine of ₹20,000 on the Aurangabad District Central Cooperative Bank Limited in Bihar for non-compliance with credit information reporting directives.
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