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The Reserve Bank of India on Friday put several restrictions on Shankarrao Mohite Patil Sahakari Bank, Akluj in Maharashtra, including a Rs 5,000 cap on withdrawal per customer, in wake of its deteriorating financial position.
The restrictions or Direction under Section 35 A of the Banking Regulation Act, 1949 effective close of the banking business hour on Friday.
With restrictions imposed, the bank, without prior approval of RBI, cannot grant loans, make any investment, incur any liability, and transfer or otherwise dispose of any of its properties.
“In particular, a sum not exceeding Rs 5,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn…,” the Reserve Bank of India (RBI) said in a statement.
The restrictions, RBI said, will remain in force for six months from the close of business on February 24, 2023 and are subject to review.
The issue of the Directions should not per se be construed as cancellation of banking license by RBI, it added.
“The bank will continue to undertake banking business with restrictions till its financial position improves,” RBI said.
The eligible depositors would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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