The Reserve Bank of India has placed restrictions on Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Ltd., Nashik, citing supervisory concerns linked to recent material developments in the bank.
The directions took effect from the close of business on July 17, 2026, and will remain in force for six months, subject to review. RBI issued the directions under Section 35A of the Banking Regulation Act, 1949, read with Section 56 of the same Act.
What the bank can and cannot do
Under the RBI directions, the Nashik-based co-operative bank cannot take several routine banking actions without prior written approval from the regulator. These include granting or renewing loans and advances, making investments, taking on liabilities, borrowing funds, or accepting fresh deposits.
The bank has also been barred from disbursing or agreeing to disburse payments, whether towards its liabilities and obligations or otherwise, unless permitted under the RBI direction. It cannot enter into compromises or arrangements, or sell, transfer, or otherwise dispose of its properties or assets, except as allowed in the direction dated July 16, 2026.
RBI has directed that a copy of the directions be displayed on the bank’s website or at its premises so that interested members of the public can read the restrictions.
Withdrawal limit set at ₹1 lakh
Considering the bank’s current liquidity position, RBI has directed the bank to allow depositors to withdraw an amount not exceeding ₹1,00,000 from savings bank accounts, current accounts, or any other account. This limit applies to a depositor’s account with the bank as stated in the directions.
The bank is also allowed to set off loans against deposits, subject to the conditions mentioned in the RBI directions. This means such adjustments can be made only within the framework specified by the regulator.
RBI has permitted the bank to spend on certain essential items. These include salaries of employees, rent, electricity bills, and other expenses specified in the directions.
Deposit insurance position
Eligible depositors are entitled to receive deposit insurance claim amounts up to a monetary ceiling of ₹5,00,000 in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation, as applicable under the DICGC Act, 1961.
The claim process is based on submission of willingness by the concerned depositors and due verification. RBI has said depositors may contact bank officials for further information. Details are also available through the DICGC website.
The ₹5 lakh insurance ceiling is separate from the immediate withdrawal restriction stated in the RBI directions. The RBI release refers to the insurance entitlement for eligible depositors under the applicable law and process.
Banking licence not cancelled
RBI has clarified that the issue of these directions should not be treated as cancellation of the bank’s banking licence. The bank will continue to undertake banking business, but only within the restrictions specified by the regulator, until its financial position improves.
The central bank said it will continue to monitor the position of Padmashri Dr. Vithalrao Vikhe Patil Co-operative Bank Ltd. It may take necessary actions, including modifying the directions, depending on circumstances and in the interest of depositors.
The press release was issued by Brij Raj, Chief General Manager, under Press Release number 2026-2027/705.
Source: Reserve Bank of India Press Releases.