RBI restricts Puducherry Co-operative Urban Bank operations
RBI restricted Puducherry Co-operative Urban Bank, capping withdrawals at ₹5,000 per depositor amid supervisory concerns.
Growth Brief DeskPublished 2 min read
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Key facts
- RBI restricted Puducherry Co-operative Urban Bank from October 21, 2026.
- Depositors can withdraw a maximum of ₹5,000 from their accounts.
- Eligible depositors can claim insurance up to ₹5,00000 from DICGC.
- The directions will remain in force for a period of six months.
The Reserve Bank of India has issued directions to Puducherry Co-operative Urban Bank Ltd, restricting its operations from the close of business on October 21, 2026. Under the new measures, the bank cannot grant loans, accept fresh deposits, or make investments without prior RBI approval.
Due to its liquidity position, depositors can withdraw up to ₹5,000 from their accounts. However, the bank is permitted to incur essential expenses like employee salaries and rent, and eligible depositors can claim up to ₹5,00,000 from DICGC.
The RBI stated that the restrictions do not amount to a cancellation of the banking license. These directions will remain in force for six months and are subject to review.
Why it matters
This RBI directive directly impacts depositors and staff of Puducherry Co-operative Urban Bank by capping cash withdrawals at ₹5,000 and halting new lending and deposit acceptance. While it restricts normal banking operations, it does not mean the bank's license has been canceled, offering some reassurance on its long-term status. Depositors can access deposit insurance up to ₹5,00,000 via DICGC, mitigating immediate financial distress. For regional cooperative banks, this action underscores tightening regulatory oversight regarding liquidity management and compliance, signaling that the central bank will step in swiftly when supervisory concerns are not addressed.
- RBI
- Regulatory Policy
Sources
Source: Reserve Bank of India