RBI Extends Restrictions on Two Banks Till September 2025

The Reserve Bank of India (RBI) has extended its restrictions on two cooperative banks — Pune Sahakari Bank Ltd. and National Mercantile Co-operative Bank Ltd., Lucknow — till September 10, 2025, as part of its ongoing regulatory oversight under the Banking Regulation Act, 1949.

Pune Sahakari Bank Ltd. Under Watch

Pune Sahakari Bank Ltd., located in Shivajinagar, Pune, was first placed under RBI directions on March 10, 2023, for an initial six-month period. Since then, the restrictions have been extended multiple times, the latest being valid until June 10, 2025. Now, the RBI has extended the validity again until September 10, 2025, under directive DOR.MON.D-13/12-22-493/2025-2026 issued on June 2, 2025.

The RBI clarified that this extension does not imply satisfaction with the financial health of the bank. All other terms and conditions from earlier directives will continue to remain in force. A copy of the latest directive is displayed at the bank’s premises for public awareness.

National Mercantile Co-operative Bank Ltd. Also Faces Extended Restrictions

Similarly, National Mercantile Co-operative Bank Ltd., based in Lucknow, was placed under RBI directions on March 9, 2023. The restrictions have been extended multiple times, most recently up to June 10, 2025, under directive DOR.MON/D-107/12-28-015/2024-2025.

Now, the RBI has extended the directive again till September 10, 2025, citing public interest as the reason. The new order is also issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, and will be subject to review. As with Pune Sahakari Bank, the existing terms and conditions remain unchanged.

What Do These RBI Directions Mean?

When the RBI places a bank under such directions, it usually means that the bank is not allowed to carry out normal banking operations like disbursing fresh loans or allowing unrestricted withdrawals, unless specifically permitted. This is a precautionary step taken to protect the interest of depositors and maintain financial stability.

No Indication of Improved Financial Health

Importantly, the RBI has stated that these extensions should not be interpreted as a sign of improved financial condition of the banks. The directions are meant to keep the banks under close supervision while giving them time to improve their financial situation or explore possible reconstruction options.

The RBI will continue to monitor both banks and may modify or withdraw the restrictions based on periodic reviews of their financial performance.