RBI Imposes Restrictions On National Urban Co-op Bank
RBI imposes restrictions on National Urban Co-op Bank, capping withdrawal at Rs 10,000 for customers due to deteriorating financial situation.
The RBI on Monday imposed several restrictions on National Urban Co-operative Bank Ltd, Pratapgarh (Uttar Pradesh), including capping withdrawal at Rs 10,000 for customers, in the wake of the lender's deteriorating financial situation. The bank will continue to undertake banking business with restrictions till its financial position improves.
The eligible depositors will be entitled to receive a deposit insurance claim amount of his/her deposits up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation.
The restrictions in the form of Directions under Section 35A of the Banking Regulation Act, 1949, on the Pratapgarh-based co-operative bank come into force from the close of business on Monday (Apr. 15, 2024).
Now, the bank cannot, without prior approval of the RBI grant or renew any loans and advances, make any investment, incur any liability, or disburse any payment whether in the discharge of its liabilities and obligations.
"In particular, a sum not exceeding Rs 10,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn subject to the conditions stated in the above RBI Directions," the central bank said.
The RBI also said the issue of Directions should not per se be construed as a cancellation of a banking license by the RBI.
The restrictions will remain in force for six months from the close of business on Apr. 15, 2024, and are subject to review, the RBI said.
