RBI Imposes Restrictions On Co-op Bank, Withdrawal Limit Capped at Rs 10,000 - Check Details

rbi imposes restrictions on co-op bank, withdrawal limit capped at rs 10,000 – check details

The Reserve Bank of India (RBI) took action on Monday by imposing several restrictions on National Urban Co-operative Bank Ltd, located in Pratapgarh, Uttar Pradesh, due to its worsening financial condition. In response to this situation, the RBI has set a limit of Rs 10,000 on withdrawals for customers. Additionally, eligible depositors can claim up to Rs 5 lakh in deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

These measures, enacted under Section 35A of the Banking Regulation Act, 1949, place various constraints on the operations of the Pratapgarh-based co-operative bank, effective immediately after the close of business on April 15, 2024. Specifically, the bank is prohibited from granting or renewing loans and advances, making investments, incurring liabilities, or disbursing payments without prior approval from the RBI.

The RBI clarified that depositors may withdraw up to Rs 10,000 from their total account balance, subject to conditions outlined in the RBI Directions. It’s important to note that the issuance of these Directions does not signify a revocation of the bank’s banking license by the RBI. The bank will continue to conduct banking activities under these restrictions until its financial situation improves.

These restrictions will be in place for six months from the close of business on April 15, 2024, and will be subject to periodic review by the RBI.

(PTI Inputs)