New Delhi, May 18 (IANS). The Reserve Bank of India (RBI) has imposed several restrictions on the Municipal Co-operative Bank Limited based in Etawah, Uttar Pradesh. In the instructions issued on Monday, the central bank said that now this bank will not give any new loan, will not renew old loans nor will it be able to make any new investment without the prior written permission of RBI.
As per RBI instructions, the bank will no longer be able to undertake any kind of liability, including borrowing funds and accepting new deposits. Apart from this, the bank will also not be able to sell, transfer or dispose of its properties or assets, except as permitted in the instructions issued by RBI on May 15, 2026.
The Reserve Bank said that in view of the current liquidity position of the bank, account holders have been allowed to withdraw a maximum of Rs 10,000 from their savings, current or other accounts. However, the Bank may adjust loan against the deposited amount subject to prescribed conditions.
The bank has been allowed to spend on essential services like employee salaries, rent, electricity bills.
According to RBI, this step has been taken to protect the interests of depositors in view of the recent developments in the bank and serious surveillance concerns. The central bank said it had been in continuous dialogue with the bank’s board and senior management in recent times on improving banking operations, but concrete corrective steps had not been taken by the bank.
RBI also clarified that eligible depositors will be able to get deposit insurance up to a maximum of Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation. For this, the depositors will have to give their consent and complete the verification process.
Bank customers have been asked to contact bank officials for more information. These instructions of RBI will remain in effect for the next six months after the close of business on May 18. However, these may be changed after reviewing the situation.
Meanwhile, RBI has also imposed a fine of Rs 20,000 on Bihar’s Aurangabad District Central Cooperative Bank Limited for not following the instructions related to ‘Credit Information Reporting’.
–IANS
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