RBI Freezes Sri Mahatma Basaveshwar Co-op Bank Deposits

RBI has frozen all withdrawals at Sri Mahatma Basaveshwar Co-operative Bank, Afzalpur, effective October 8, 2026.

Here's what happened: RBI has directed Sri Mahatma Basaveshwar Co-operative Bank Ltd., Afzalpur, to freeze all customer withdrawals from savings, current, and all other deposit accounts, effective from the close of business on October 8, 2026.. The directions were issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, vide Directive Ref. No. BLR.DOS.SSMS.No.S1220/09-01-243/2026-2027 dated October 7, 2026.. The bank is barred from granting or renewing loans, accepting fresh deposits, making investments, or disbursing any payments without prior written approval from RBI.. RBI stated that repeated engagement with the bank's Board and Senior Management failed to produce concrete improvements, making these directions necessary to protect depositors' interests..

What you should do: If you hold a deposit at Sri Mahatma Basaveshwar Co-operative Bank, Afzalpur, visit the bank's premises or its official website immediately to read the full RBI Direction dated October 7, 2026, which lists all permitted and restricted actions.. Check your DICGC (Deposit Insurance and Credit Guarantee Corporation) eligibility — insured depositors are entitled to a claim of up to ₹5 lakh covering all deposits held in the same bank; contact DICGC at www.dicgc.org.in for the claims process.. If you have an outstanding loan with this bank, note that RBI has permitted the bank to set off your loan balance against your deposit, subject to conditions in the directive — ask the bank in writing how this applies to your account.. For grievances or if your rights as a depositor are not being honoured, file a complaint through the RBI Ombudsman portal at sachet.rbi.org.in..

This notice directly affects depositors — individuals and entities — who hold savings accounts, current accounts, or any other deposit accounts with Sri Mahatma Basaveshwar Co-operative Bank Ltd., Afzalpur. Borrowers of this bank are also affected, as no new loans or renewals can be processed without RBI's written approval. Depositors at other co-operative banks or any other bank are not affected by this specific directive.

For complaints against banks or NBFCs, our RBI complaint guide explains the free RB-IOS 2026 route.