IT Correspondent
Mumbai, Feb 20:
In view of the weak financial condition, the Reserve Bank of India on Friday put restrictions on the Deccan Urban Co-operative Bank Ltd, based in Vijayapura, in Karnataka, from granting fresh loans or accepting deposits.
Similarly customers of the bank will not be able to withdraw more than Rs. 1,000 from their savings account for the next six months. The RBI in a statement said “Considering the bank’s present liquidity position, a sum not exceeding Rs. 1,000 only of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn.” It further added that the directions are set to remain in force for six months from the close of business on February 19, 2021 and are subject to review.
The Deccan Urban Co-operative Bank Ltd has been prohibited from making any fresh investments or incur any liability without taking permission from the Reserve Bank of India.
“However, 99.58 per cent of the depositors are fully covered by the Deposit Insurance and Credit Guarantee Corporation insurance scheme,” said the central bank. The RBI added that putting the bank under restrictions should not be mistaken as cancellation of its banking license.
The Deccan Urban Co-operative Bank Ltd will continue work under restrictions until its financial health improves. The Reserve Bank of India will think of modifications in the orders as per the conditions.