Mumbai, Dec 17: The Reserve Bank of India (RBI) on Tuesday imposed stringent restrictions on Loknete RD (Appa) Kshirsagar Sahakari Bank in Nashik, including a ban on withdrawals, citing material supervisory concerns. Eligible depositors can claim up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said.
The restrictions, effective from the close of business on Tuesday, prevent the bank from granting or renewing loans, making investments, incurring liabilities, or disbursing payments without prior RBI approval. However, the bank may offset loans against deposits and meet essential expenditures such as salaries, rent, and electricity.
“These directions are necessitated due to material supervisory concerns emanating from developments in the bank and aim to protect the interests of depositors,” the RBI stated. The restrictions will remain in force for six months, subject to review, and do not amount to a cancellation of the bank’s license.
The RBI added that the bank will continue limited operations while its financial position stabilizes, with the central bank monitoring the situation and adjusting directions as necessary to safeguard depositor interests.