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September 22, 2023
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RBI imposes Rs 5,000 withdrawal limit on this bank from 6 months

RBI news: Customers of Shankarrao Mohite Patil Sahakari Bank, Akluj in Maharashtra cannot withdraw more than Rs 5,000 from their accounts as the Reserve Bank of India (RBI) has put several restrictions on the bank. The decision comes in the wake of the bank’s deteriorating financial position.

The restrictions will remain in force for six months from the close of business on February 24, 2023, and are subject to review. The bank now, without prior approval of RBI, cannot grant loans, make any investment, incur any liability, and transfer or otherwise dispose of any of its properties.

The restrictions or Direction under Section 35 A of the Banking Regulation Act, 1949 effective close of the banking business hours on Friday.

“In particular, a sum not exceeding Rs 5,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn…,” the Reserve Bank of India (RBI) said in a statement.

The issue of the Directions should not per se be construed as cancellation of banking license by RBI, it added. “The bank will continue to undertake banking business with restrictions until its financial position improves,” RBI said.

The eligible depositors would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation.

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