Document title: Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Mogaveera Co‑operative Bank Ltd., Bombay
Issuing authority: Reserve Bank of India
Reference number: Directive Ref. No. CO.DOS.SED.No.1887/12-22-144/2026-2027
Date: June 12, 2026
Banking and Credit
The Reserve Bank of India, exercising powers under sub‑section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, has directed Mogaveera Co‑operative Bank Ltd. that, as of the close of business on June 12, 2026, it shall not, without prior written approval of the RBI, grant or renew any loans and advances, make any investment, incur any liability including borrowing of funds, accept fresh deposits, disburse or agree to disburse any payment, enter into any compromise or arrangement, or sell, transfer or otherwise dispose of any of its properties or assets, except as specifically notified in the RBI Directions dated June 11, 2026. The bank is permitted to incur expenditure on essential items such as employee salaries, rent, electricity bills, and similar necessities as outlined in the Directions. Additionally, the bank may permit withdrawal of a sum not exceeding ₹1,00,000 from savings, current or any other depositor accounts, and may set off loans against deposits subject to the conditions stated in the Directions.
Financial Stability and Inclusion
Depositors of Mogaveera Co‑operative Bank are entitled to claim deposit insurance coverage up to a monetary ceiling of ₹5,00,000 per depositor from the Deposit Insurance and Credit Guarantee Corporation (DICGC), in accordance with the DICGC Act, 1961. Claims are to be made after verification and submission of willingness by the depositors, with further information available on the DICGC website. The RBI emphasizes that the issuance of these Directions does not constitute cancellation of the bank’s licence; the bank will continue to conduct banking business subject to the imposed restrictions until its financial position improves. The RBI will continue to monitor the bank’s situation and may modify the Directions as warranted.
Regulatory and Policy Measures
The RBI has continuously engaged with the Board and senior management of the bank to improve its functioning. However, due to a lack of concrete efforts to address supervisory concerns and protect depositor interests, the RBI deemed it necessary to issue the present Directions. These Directions will remain in force for a period of six months from the close of business on June 12, 2026, and are subject to review and possible modification based on the bank’s evolving circumstances.
The directive reflects the RBI’s use of its statutory powers to safeguard depositor interests, maintain financial stability, and ensure that the bank operates within a controlled framework while its liquidity position improves.