RBI Imposes Strict Restrictions on Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Following Supervisory Concerns
The Reserve Bank of India (RBI) has issued a significant regulatory directive under Section 35 A, read with Section 56 of the Banking Regulation Act, 1949, concerning the Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Ltd. Nashik.This action follows recent material developments within the bank that raised serious supervisory concerns. The RBI has intervened to safeguard the interests of depositors while ensuring the stability of the cooperative banking framework.
Critical Restrictions on Lending and Asset Management
Effective from the close of business on July 17, 2026, the bank is prohibited from granting or renewing any loans and advances without prior written approval from the RBI. The regulatory crackdown extends to making any investments or incurring new liabilities, including the borrowing of funds and the acceptance of fresh deposits.The bank is also restricted from dishing out payments for its obligations, entering into compromises or arrangements, or selling and disposing of any properties or assets. These measures are strictly enforced except as specifically notified in the RBI Direction dated July 16, 2026.
Limited Withdrawal Facilities and Essential Expenditure
Given the bank's current liquidity position, the RBI has permitted a restricted withdrawal limit for depositors. Customers can withdraw a sum not exceeding ₹1,00,000 (Rupees One Lakh only) from savings bank, current accounts, or any other accounts held by depositors.The bank maintains the right to set off loans against deposits, provided it adheres to the conditions specified in the official RBI Directions. However, the bank is still permitted to incur expenditures for essential operational items such as employee salaries, rent, and electricity bills.
Deposit Insurance Coverage and Regulatory Status
To protect public interests, eligible depositors are entitled to receive deposit insurance claims up to a monetary ceiling of ₹5,00,000 (Rupees Five Lakh only). These claims are processed through the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the DICGC Act, 1961.The RBI has clarified that these directions do not constitute a cancellation of the bank's license. The institution will continue to operate its banking business subject to the specified restrictions until its financial position improves.
Oversight Period and Ongoing Monitoring
These regulatory measures are slated to remain in force for a period of six months from the close of business on July 17, 2026. The RBI has maintained that these directions are subject to review based on the bank's performance and evolving circumstances.The central bank continues to monitor the situation closely and reserves the right to modify these restrictions or take further actions as warranted in the interest of depositors.
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