RBI puts Rs 1000 withdrawal cap on Karnataka based Urban Co-operative Bank for next 6 months

RBI puts Rs 1000 withdrawal cap on Karnataka based Urban Co-operative Bank for next 6 months

New Delhi: The Reserve Bank of India on Friday (February 20, 2021) barred Karnataka based Urban Co-operative Bank from granting fresh loans or accepting deposits.

Customers cannot withdraw more than Rs 1000 from their savings account for a period of six months. “Considering the bank’s present liquidity position, a sum not exceeding ₹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the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn,” said the Central Bank in a statement.

These directions are set to remain in effect for the next six months and are subject to review, the Reserve Bank added.  The Urban Co-operative Bank has been asked not to make any fresh investments or incur any liability without its prior permission.

The Reserve Bank further clarified that the issue of the above directions by the RBI should not be construed as a cancellation of a banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these directions depending upon circumstances.

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