RBI extends curbs on Innovative Co-op Urban Bank, New Delhi, to Jan 2027
Restrictions on Innovative Co-operative Urban Bank in New Delhi, in place since July 2025, will now run until January 4, 2027.
Official title: Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 – Innovative Co-operative Urban Bank Limited, New Delhi – Extension of Period · Press Release 2026-2027/1229
What happened
RBI has extended its Section 35A directions on Innovative Co-operative Urban Bank Limited, New Delhi. The directions first took effect at the close of business on July 4, 2025, for six months, and have been extended since, most recently by a directive dated June 29, 2026, up to October 4, 2026.
The extension is for three more months, from the close of business on October 4, 2026 to the close of business on January 4, 2027, and RBI will review it. All the other terms of the original directions stay the same. Such directions usually mean the bank cannot give new loans, take fresh deposits or make payments without RBI's written approval, and withdrawals are capped.
RBI says the extension should not be read as a sign that it is satisfied with the bank's finances. The release does not say whether the bank is improving or what will happen after January 4, 2027. Possible outcomes in such cases include lifting the curbs, a merger with another bank, or cancelling the licence.
What it means for you
If you have money in Innovative Co-operative Urban Bank, New Delhi, the restrictions continue, including whatever withdrawal limit the original directions set. This release does not restate it, so ask at the branch or check the notice the bank must display. Your deposits remain covered by DICGC deposit insurance up to ₹5 lakh per depositor (principal and interest together), and if you have a loan from the bank you must keep repaying it as usual.
What it means for businesses
Shops and small firms that bank with Innovative Co-operative Urban Bank still face the same limits on withdrawals and payments, so keep working accounts at another bank. Borrowers cannot get new or renewed loans from it while the directions last. There is no effect on other banks or their customers.
Read the original
Press release on rbi.org.in ↗ Official PDF ↗
This explainer simplifies the official text. If anything here differs from the RBI's release, the release is right.