The Reserve Bank of India (RBI) has issued directions to Tiruvalla Urban Co-operative Bank Ltd., effective from the close of business on October 8, 2026. The bank is prohibited from granting or renewing loans, making investments, incurring liabilities, accepting fresh deposits, or disbursing payments without prior RBI approval, according to an RBI notification dated October 7, 2026.
The RBI's directive, issued under Section 35 A read with Section 56 of the Banking Regulation Act, 1949, also restricts the bank from selling or transferring its assets except as specified. Withdrawals from savings, current, or other deposit accounts are barred due to the bank's liquidity position, though loan set-offs against deposits are permitted under certain conditions. Essential expenditures such as salaries remain allowed, the RBI stated.
This intervention reflects RBI's regulatory oversight to maintain financial stability in cooperative banks facing liquidity challenges. Similar measures have been applied in the past to other urban cooperative banks to prevent systemic risks and protect depositors. The move underscores RBI's role in enforcing prudent banking practices and safeguarding public interest within India's cooperative banking sector.
The full text of the RBI directions has been mandated for display on the bank's website and premises for public viewing, ensuring transparency. The restrictions commence from October 8, 2026, and will remain until further notice from the RBI, as per the official notification on rbi.org.in.