- The Reserve Bank of India (RBI) has imposed multiple restrictions on Mumbai-based Mogaveera Co-operative Bank due to its deteriorating financial position.
- The restrictions, which came into effect after the close of business on June 12, 2026, will remain in force for six months and are subject to review by the central bank.
- Among the key measures announced, depositors will be allowed to withdraw a maximum of ₹1 lakh from their accounts, while the bank has been barred from granting fresh loans, accepting new deposits and making investments.
What Restrictions Has RBI Imposed?
According to the RBI, Mogaveera Co-operative Bank will not be allowed to:
- Grant or renew loans and advances
- Make any investments
- Borrow funds or incur fresh liabilities
- Accept fresh deposits from customers
- Expand lending operations during the restriction period
The central bank stated that these directions have been issued to safeguard the interests of depositors and ensure financial stability.
₹1 Lakh Withdrawal Limit for Depositors
- Considering the bank’s current liquidity position, RBI has permitted depositors to withdraw up to ₹1 lakh from their savings, current or any other deposit accounts.
- The withdrawal cap aims to balance depositor needs while preserving the bank’s financial resources during the corrective period.
- However, depositors who have balances above this amount will have to wait for further directions or improvements in the bank’s financial condition.
- The imposition of restrictions does not mean cancellation of the bank’s banking licence.
- Mogaveera Co-operative Bank will continue to conduct banking operations, but only within the limits prescribed by the RBI.
- The central bank also said it will continue to monitor the bank’s financial position and may modify the directions depending on future developments.
Are Depositors’ Funds Safe?
Eligible depositors are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.
Under DICGC insurance:
- Deposits up to ₹5 lakh per depositor are insured.
- The insurance amount includes both principal and accrued interest.
- Depositors become eligible for claims if the bank undergoes liquidation or RBI permits claim settlement under applicable rules.
This insurance cover provides an additional layer of protection to depositors of cooperative banks.
About Mogaveera Co-operative Bank
- Mogaveera Co-operative Bank is a Mumbai-based urban cooperative bank catering primarily to local communities and small businesses.
- Like other urban cooperative banks, it operates under the regulatory supervision of the Reserve Bank of India.
- The RBI periodically reviews the financial health of cooperative banks and may impose restrictions when concerns arise regarding liquidity, capital adequacy or governance.
RBI’s Supervisory Framework for Cooperative Banks
The RBI has strengthened oversight of cooperative banks in recent years following several cases of financial stress in the sector.
The central bank uses various supervisory tools, including:
- Prompt corrective measures
- Operational restrictions
- Enhanced monitoring
- Governance reforms
- Liquidity and capital adequacy assessments
These measures are intended to protect depositors and maintain trust in India’s banking system.
Conclusion
The RBI’s decision to impose six-month restrictions on Mogaveera Co-operative Bank underscores the regulator’s commitment to protecting depositors and ensuring financial stability.
While customers can continue limited banking operations and withdraw up to ₹1 lakh, the bank will face restrictions on lending, fresh deposits and investments until its financial health improves.