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One more bank from the cooperative sector has come under directions from the Reserve Bank of India (RBI). Last week, the Reserve Bank has put Vijayapur, Karnataka-based Deccan Urban Co-operative Bank Ltd under restrictions. For the next six months, account holders and depositors of the bank will not be able to withdraw more than Rs1000 from their account.
In a release, RBI says, Considering the bank s present liquidity position, a sum not exceeding Rs1,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI directions. However, 99.58% of the depositors are fully covered by the DICGC insurance scheme.
RBI has issued certain Directions to Vijayapur based Deccan Urban Co-operative Bank, Karnataka. The UCB has been restrained from carrying several activities from the close of business on February 19, 2021.
The UCB cannot without prior approval of RBI in writing grant or renew any loans and advances or make any investment, among others.
Considering the bank’s present liquidity position, a sum not exceeding Rs 1000/- (Rs. One thousand 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the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions. However, 99.58% of the depositors are fully covered by the DICGC insurance scheme.
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Karnataka-based Deccan Urban Co-operative Bank has been put under restriction by the banking regulator, Reserve Bank of India. It has imposed a Rs 1,000 withdrawal limit on the customers due to poor financial health of the bank.
The regulator stated the bank cannot write grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets.
The central bank imposed the withdrawl cap on Deccan Urban Co-op bank citing its financial position
The Reserve Bank of India (RBI) has imposed a withdrawal cap of Rs 1,000 on customers of the Deccan Urban Co-operative Bank and has barred the lender from granting new loans or accepting deposits due to its liquidity position. The Karnataka-based lender is restricted to undertake any fresh business, including renewing any fresh loans or making new investments. The central bank said that the directions for the bank will remain in force for six months from the close of business on February 19 and are subject to review. 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, said the RBI In a statement late on Friday, February 19. (