By Admin 
Reserve Bank of India: Taking strict action against The Baghat Urban Co-operative Bank, a bank based in Solan, Himachal Pradesh, the Reserve Bank of India (RBI) has increased the withdrawal limit per customer to Rs 10,000. That means depositors will be able to withdraw a maximum of Rs 10,000 at a time from their savings, current or any other account in the bank. The Reserve Bank has taken this step in view of the current cash position of the bank.
What kind of restrictions were imposed on the bank?
Given the lack of efforts on the part of the bank to address supervisory concerns and protect the interests of depositors, the Reserve Bank had to intervene in the matter. RBI has imposed further restrictions on the bank, under which the bank can neither give loan nor give any advance without the written permission of the Reserve Bank, the bank cannot also undertake any liability such as lending or taking new deposits.
Depositors will be able to claim insurance
RBI said, “In view of the current cash position of the bank, the bank has been directed to allow withdrawal of a maximum of Rs 10,000 out of the total balance deposited in the savings bank or current account or any other account of the depositor. However, the bank reserves the right to adjust the deposits of the customers against their loan.”
Eligible depositors can claim insurance on their deposits up to a maximum of Rs 5 lakh from Deposit Insurance and Credit Guarantee Cooperation (DICGC). However, RBI has also clearly stated that the issuance of these instructions should not be interpreted as cancellation of banking license by RBI. Until the financial condition of the bank improves, the bank will continue its operations under these restrictions.
Also read:
This bank is going to be closed, RBI has taken a big decision; Don’t you also have an account?