Ahmedabad: The Reserve Bank of India (RBI) has imposed restrictions on Gujarat Rajya Karmachari Co-operative Bank in the city, citing concerns over the bank’s financial condition and liquidity position. The directions came into effect from the close of business on March 11, 2026, under provisions of the Banking Regulation Act, 1949.

According to the RBI order, the bank will not be allowed to grant or renew loans, make investments, borrow funds, accept fresh deposits, or sell any assets without prior written approval from RBI. The bank has also been directed not to allow withdrawals from savings, current, or any other deposit accounts for the time being. However, it may adjust loans against deposits subject to the conditions laid down by the RBI.

The central bank said the action was taken after repeated discussions with the bank’s board and management failed to bring sufficient improvement in its functioning and financial discipline, raising concerns about protecting depositors’ interests.

RBI clarified that the bank may continue to incur essential expenses such as staff salaries, rent, and electricity bills as permitted under the directions.

Depositors are eligible to receive deposit insurance up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to verification and submission of required consent forms. Customers have been advised to contact the bank for details or visit the DICGC website for further information.

The RBI also clarified that these restrictions do not mean cancellation of the bank’s licence. The bank will continue to operate under the imposed conditions, and the RBI will review the situation depending on the bank’s financial performance.

The restrictions will remain in force for six months from March 11, 2026, unless modified earlier by the RBI. DeshGujarat