The Reserve Bank of India (RBI) has imposed several restrictions on Puducherry Cooperative Bank amid concerns over the bank’s financial position. Under the directions, depositors will be allowed to withdraw a maximum of Rs 5,000 from their savings, current or other accounts, subject to the conditions specified by the central bank.
The restrictions came into effect from the close of business on 21 October 2026 and will remain in force for six months. The RBI said the directions will be reviewed periodically.
The central bank said it had recently held discussions with the bank’s board of directors and senior management regarding measures to improve its functioning. However, the bank had not taken concrete steps to address supervisory concerns and safeguard the interests of depositors, according to the RBI.
The restrictions have been issued under the relevant provisions of the Banking Regulation Act, 1949. As part of the directions, Puducherry Cooperative Bank has been barred from granting or renewing loans and advances, making investments, incurring liabilities and transferring or disposing of its properties or assets, except as permitted under the RBI’s directions.
Considering the bank’s current liquidity position, the RBI has specifically restricted withdrawals to Rs 5,000 from savings accounts, current accounts or any other accounts held by a depositor. The bank may, however, adjust eligible loans against deposits, subject to the conditions laid down by the RBI.
For depositors, the restrictions mean that access to funds will be limited during the period of the directions. However, eligible deposits are covered under the deposit insurance framework of the Deposit Insurance and Credit Guarantee Corporation (DICGC), with insurance cover of up to Rs 5 lakh per depositor, subject to applicable rules and conditions.
The RBI’s action comes as part of its supervisory measures to address the bank’s financial and operational concerns and protect depositor interests. The restrictions do not amount to cancellation of the bank’s licence, and their continuation will be assessed periodically by the central bank.
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