RBI imposes curbs on Gauhati Cooperative Urban Bank; deposit withdrawals capped at ₹35,000

The Reserve Bank of India (RBI) on Wednesday imposed a slew of restrictions on The Gauhati Cooperative Urban Bank Ltd, barring it from granting loans, accepting fresh deposits or making investments without prior approval, in view of the deteriorating financial position of the lender.

The restrictions in the form of 'Directions' came into effect from the close of business on December 17, 2025, and will remain in force for six months, subject to review.

Under the directions, the bank has been prohibited from granting or renewing loans and advances, making any investment, incurring liabilities including borrowings, accepting fresh deposits, or disbursing payments without the central bank’s prior written approval.

It has also been barred from entering into any compromise or arrangement and from selling or transferring its assets, except as permitted by the RBI.

"Considering the bank's current liquidity position, the bank has been directed to permit withdrawal of a sum not exceeding ₹35,000 of the total balance held in savings bank or current accounts or any other account of a depositor, but is allowed to set off loans against deposits," the RBI said.

The bank may, however, incur expenditure on essential items such as employee salaries, rent and electricity bills, as specified by the RBI.

The RBI said it has, in the recent past, engaged with the Board and senior management of The Gauhati Cooperative Urban Bank for improvement in its functioning.

However, the lack of concrete efforts taken by the bank to address the supervisory concerns and to protect the interests of depositors of the bank necessitated the issuance of the directions, it added.

The RBI clarified that eligible depositors will be entitled to receive deposit insurance claims of up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as per the provisions of the DICGC Act, 1961.

The issuance of the directions should not be construed as cancellation of the bank’s licence, the RBI said.

"The bank will continue to undertake banking business subject to restrictions specified in the said directions till its financial position improves," it added.

The RBI will continue to monitor the position of the bank and will take necessary actions, including modifications of the directions, as warranted, depending upon circumstances and in the interest of the depositors.