The Reserve Bank of India (RBI) has imposed restrictions on another bank. These restrictions have been imposed for a period of six months with several conditions. RBI has taken this decision after assessing the financial condition of the bank. The withdrawal limit has been fixed at ₹1 lakh; This means that account holders can withdraw only up to ₹1 lakh from their savings account and are not allowed to withdraw more than that. However, repayment of loan EMI is allowed. Apart from this, the bank has been barred from making any investment or giving loan. RBI has imposed these restrictions on Mogaveera Cooperative Bank for six months. In its statement, the central bank said these restrictions will come into effect from close of business on Friday, will remain in effect for six months and will be reviewed.
What is the bank prevented from doing?
The statement further clarified that the co-operative bank cannot make or renew any loans or advances, make investments, or incur any liabilities – including borrowing funds or accepting new deposits.
How much money can you withdraw from this bank?
It further said that in view of the current liquidity position of the bank, it has been directed not to allow withdrawal of more than ₹1 lakh from the savings, current or other accounts of any depositor. RBI said it will remain in touch with the board and senior management of the bank to improve its performance. In its note, the RBI said the issuance of these directions was necessitated by the lack of concerted efforts to address concerns related to financial stress and protect the interests of bank depositors. RBI also clarified that issuing these instructions should not be interpreted as cancellation of the banking license of the bank.
What should the bank do after the restrictions? The Bank will continue banking operations subject to the restrictions imposed under the instructions given above until its financial position improves. According to PTI, the RBI further said it will continue to monitor the bank’s situation and take necessary steps in the circumstances and in the interest of depositors – including making changes in the instructions if necessary. Eligible depositors will be entitled to receive a deposit insurance claim of up to ₹5 lakh on their deposits from the ‘Deposit Insurance and Credit Guarantee Corporation’. RBI said that depositors can contact bank officials for more information.
