Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 – Puducherry Co-operative Urban Bank Ltd
It is hereby notified for information of the public that in exercise of powers vested in it under sub section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India (RBI) vide Directive Ref. No. CHN.DoS.UCBs.No.S336/16-05-847/2026-2027 dated October 19, 2026, has issued certain Directions to ‘Puducherry Co-operative Urban Bank Ltd’, (“the bank”),…
In a recent directive, the Reserve Bank of India (RBI) has issued stringent rules for Puducherry Co-operative Urban Bank Ltd (UCB). According to the RBI Directive Ref. No. CHN.DoS.UCBs.No.S336/16-05-847/2026-2027, dated October 19, 2026, the bank is barred from providing or renewing loans, making investments, incurring liabilities, accepting deposits, or entering into agreements or selling assets, starting October 21, 2026. This restriction aims to improve the bank's liquidity position.
The RBI has engaged with the bank's board and management previously, but deemed insufficient efforts to address supervisory concerns and protect depositor interests. Therefore, these new directions have been implemented.
Eligible depositors can claim insurance up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), provided they submit a request and undergo verification. The bank can still cover essential expenses like employee salaries, rent, and electricity bills.
RBI's decision to issue these directions does not cancel the bank's license. The bank remains operational, subject to the specified restrictions, until its financial situation improves. The RBI will continue monitoring the bank's position and may modify these directives as necessary, depending on the circumstances and the best interests of depositors.
Written by urgent.news from Reserve Bank of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
