Economy
RBI Blocks Afzalpur Bank Withdrawals, Caps Deposit Insurance At ₹5 Lakh
RBI has restricted Sri Mahatma Basaveshwar Co-operative Bank’s operations and halted depositor withdrawals for six months.
What happened
From the close of business on October 8, 2026, Sri Mahatma Basaveshwar Co-operative Bank cannot grant loans, accept fresh deposits, incur liabilities, make investments or disburse payments without RBI approval. Withdrawals from savings, current and other depositor accounts are barred. Eligible depositors can claim insurance of up to ₹5 lakh through DICGC, subject to verification.
Why it matters
Depositors cannot access their funds under the restrictions, while the bank’s operations remain tightly controlled. RBI cited inadequate action by the bank to address supervisory concerns and protect depositors.
Source: RBI