Mogaveera Co-operative Bank: RBI’s Six-Month Curbs
Why in the news
The central bank put temporary limits on a Mumbai urban co-operative bank because of its weak financial position. Customers can still access some money, but within a cap.
Key facts
- Bank: Mogaveera Co-operative Bank Limited, Mumbai, Maharashtra.
- Period: six months, starting at close of business on 12 June 2026, subject to review.
- Legal basis: Section 35A of the Banking Regulation Act, 1949, which allows such directions.
- Status: licence not cancelled.
| Barred without RBI approval | Still allowed |
|---|---|
| Granting or renewing loans | Paying employee salaries |
| Making investments | Rent |
| Fresh borrowings or other new liabilities | Electricity bills and other essential costs |
| Accepting fresh deposits | Withdrawals up to ₹1 lakh per depositor |
Why RBI acted
- Worsening finances and liquidity stress.
- Board’s lack of real effort to fix supervisory concerns.
- Need to protect depositors.
Deposit insurance and DICGC
- Insurance limit is ₹5 lakh for each depositor in each bank (DICGC Act, 1961), lifted from ₹1 lakh in 2020.
- DICGC is a wholly owned RBI subsidiary, headquartered in Mumbai, formed on 15 July 1978 by merging DIC (1962) and CGCI (1971).
- Coverage spans scheduled commercial banks, regional rural banks, urban co-operative banks and qualifying local area banks.
- DICGC (Amendment) Act, 2021: depositors get insured money inside 90 days once a bank is placed under a moratorium or similar curbs.
Co-operative bank basics
- Owned and run by members; short-term rural credit has a three-tier structure of State Co-operative Banks, District Central Co-operative Banks and PACS.
- Urban Co-operative Banks work in towns; Mogaveera is one.
- Dual control: RBI for banking functions, Registrar of Co-operative Societies for management.
- Banking Regulation (Amendment) Act, 2020 expanded RBI’s powers over these banks after the PMC Bank crisis.
Exam angle
- Directions under Section 35A do not equal licence cancellation.
- Insurance limit: ₹5 lakh.
- Withdrawal cap here: ₹1 lakh.