The Bank is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions | Photo Credit: bl-online Administrator

The Reserve Bank of India has placed Mogaveera Co-operative Bank Ltd., Bombay, under Directions for six months, whereby, from the close of business on June 12, 2026, it cannot, without RBI’s prior approval, grant or renew any loans and advances, make any investment, incur any liability including borrowing funds and accepting fresh deposits.

Considering the bank’s present liquidity position, the bank has been directed to permit withdrawal of a sum not exceeding ₹1 lakh from savings bank or current accounts or any other account of a depositor, per a Central bank statement. The Bank is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions.

Further, the bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, etc., as specified in the said Directions.

The central bank said eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of ₹5 lakh in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification.

RBI said without its permission, the bank cannot disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions dated June 11, 2026.

“RBI continuously engaged with the Board and senior management of the bank for improvement in its functioning. However, lack of concrete efforts by the bank to address the supervisory concerns and to protect the interest of depositors of the bank, necessitated issuance of these Directions,” per RBI statement.

The central bank emphasised that the issue of the above Directions by the RBI should not per sebe construed as cancellation of the banking license.

The bank will continue to undertake banking business subject to restrictions specified in the said Directions till its financial position improves.

The RBI observed that it continues to monitor the position of the bank and will take necessary actions including modifications of these Directions, as warranted, depending upon circumstances and in the interest of the depositors.

The Central bank’s Directions for Mogaveera Co-operative Bank will remain in force for a period of six months from the close of business on June 12, 2026, and are subject to review.

Published on June 12, 2026