Ahmedabad, March 12, 2026 – The Reserve Bank of India (RBI) has taken significant action against the Gujarat Rajya Karmachari Co-operative Bank due to serious concerns about its financial stability. Effective March 11, the bank is barred from engaging in any fresh business activities.
Under this directive, the bank cannot grant new loans or renew existing ones. It’s also prohibited from making investments or borrowing funds. On top of that, no fresh deposits can be accepted and assets can’t be sold without prior approval from the RBI.
But perhaps most alarming for customers is the restriction on withdrawals. All savings and current accounts are essentially frozen for now. However, there’s a small allowance where loans can be adjusted against deposits under specific conditions set by the RBI.
The central bank emphasized that this move came after numerous discussions with the bank’s management failed to yield improvements in its operational discipline. “We need to protect depositors’ interests,” an RBI official noted.
Despite these harsh measures, essential expenses like staff salaries and utility bills will still be covered as per RBI guidelines. Customers have been informed they can receive deposit insurance up to ₹5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC), provided they submit necessary forms.
Importantly, these restrictions don’t equate to a cancellation of the bank’s license; it remains operational but under strict oversight. The RBI plans to reassess the situation based on future financial performance
The imposed restrictions will last for six months unless modified sooner by regulators.