RBI imposes withdrawal restrctions on Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Kolhapur
Mumbai: The Reserve Bank of India (RBI) has imposed a string of restrictions on Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur, including on withdrawals, owing to the lender's deteriorating financial position.
Despite the withdrawal limitation, the depositors are protected against risks posed by this kind of scenario with 99.84 percent of them being covered under the DICGC insurance scheme.
Under the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance scheme, deposits of up to Rs 5 lakh are insured.
The restrictions will remain in force for a period of six months from the close of business on May 13, 2022, and are subject to review.
"Considering the bank's present liquidity position, no amount from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions...," it said.
The central bank further said the issuance of the directions should not per se be construed as cancellation of the banking licence by RBI.
"The bank will continue to undertake banking business with restrictions as stated in the Directions till its financial position improves," it said.
The Reserve Bank said that it may consider modifications of the directions depending upon circumstances.
Unless RBI gives prior approval, the bank cannot grant or renew any loans and advances, make any investment, incur any liability, and dispose of any of its properties or assets, among other restrictions.
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