Indian The Reserve Bank (RBI) on Wednesday took strict action against a bank and imposed several restrictions. This action of RBI will have a direct impact on the bank customers and they will not be able to withdraw the money deposited in their own accounts. Taking action against the bank, RBI has also fixed the withdrawal limit by customers at Rs 35,000. That is, customers will no longer be able to withdraw more than Rs 35,000 from their bank account. However, these restrictions have been imposed on only one bank and will have no impact on other banks. RBI today took this action in view of the deteriorating financial condition of Guwahati Cooperative Urban Bank.
RBI restrictions will remain in effect for the next 6 months
All the restrictions of the Reserve Bank of India have come into effect with the closure of banks on Tuesday and will remain in force for the next 6 months. As per the instructions, the co-operative bank cannot give any new loan or renew the already existing loan without the prior permission of the Reserve Bank. Furthermore, these banks can no longer make any new investments, take any liabilities or make any payments. “In view of the current cash position of banks, banks are directed not to allow depositors to withdraw any amount exceeding Rs 35,000 out of the total amount held in savings bank or current accounts or any other account, but are permitted to adjust loans against deposits,” the Reserve Bank of India said.
Customers will be entitled to receive deposit insurance claim amount up to Rs 5 lakh from DICGC.
The Reserve Bank said it has recently held talks with the board and senior management of Guwahati Cooperative Urban Bank to improve its functioning. It said, however, the lack of concerted efforts by the bank to address supervisory concerns and protect the interests of the bank’s depositors necessitated the issuance of the directions. Eligible depositors will be entitled to receive deposit insurance claim amount of up to Rs five lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
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