AnyTime News 
Withdrawals Halted, Fresh Loans and Deposits Barred
Depositors Face Uncertainty; Insurance Cover Limited to ₹5 Lakh
Anytime News Network – Pooja Srivastava
In a significant regulatory crackdown, the Reserve Bank of India has imposed strict operational restrictions on The U.P. Civil Secretariat Primary Cooperative Bank Limited in Lucknow, raising concerns among thousands of depositors about the safety of their funds.
According to the directive issued by the RBI on March 11, 2026, the cooperative bank will not be allowed to grant or renew loans, make investments, incur liabilities, or accept fresh deposits without prior written approval from the central bank. The move follows serious supervisory concerns regarding the bank’s financial health and management practices.
One of the most alarming aspects of the directive is the suspension of withdrawals from savings, current, or any other depositor accounts due to the bank’s weak liquidity position. Depositors will not be able to access their funds until further notice, though the bank has been permitted to set off loans against deposits under specific conditions.
The RBI stated that it had engaged with the bank’s board and senior management several times in the past to address operational weaknesses and safeguard depositor interests. However, the regulator observed a lack of concrete corrective measures from the bank’s side, which ultimately compelled it to issue the restrictive directions.
While the restrictions have intensified anxiety among depositors, a limited safety net remains available. Eligible depositors may claim deposit insurance of up to ₹5 lakh through the Deposit Insurance and Credit Guarantee Corporation, as per the provisions of the DICGC Act, 1961, after due verification and submission of required consent.
The central bank clarified that the issuance of these directions should not be interpreted as cancellation of the bank’s license. The bank will continue to operate under regulatory restrictions while the RBI closely monitors its financial condition.
The restrictions will remain in force for six months from March 11, 2026, after which the regulator may review or modify them depending on the bank’s financial recovery and the overall situation.
