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Wednesday, September 29, 2021

This bank’s customers after RBI restrictions can’t withdraw money for six months

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The RBI has put restrictions on withdrawals from Nashik’s (Maharashtra) Independence Co-operative Bank Limited due to the lender’s present liquidity position.

Considering the bank’s present liquidity position, no amount from the entire balance across all savings bank or current accounts or the other account of a depositor, could also be allowed to be withdrawn, but are allowed to line off loans against deposits subject to the conditions stated within the above RBI Directions. However, 99.89 percent of the depositors are fully covered by the DICGC insurance scheme, the RBI said.

As per the insurance scheme, every depositor during a bank is entitled to receive deposit claim amount of his/her deposits up to Rs 5 lakh from the DICGC. The restrictions will remain effective for a period of six months.

RBI further mentioned that the Chief military officer of the aforesaid bank shall not, without prior approval of RBI in writing grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or comply with disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise eliminate any of its properties or assets except as notified within the RBI Direction dated February 09, 2021 a replica of which is displayed on the bank’s premises for perusal by interested members of the general public .

The RBI also added that it’s going to consider modifications of the directions depending upon circumstances. the difficulty of the above Directions by the RBI shouldn’t intrinsically be construed as cancellation of banking license by RBI. The bank will still undertake banking business with restrictions till its financial position improves. The RBI may consider modifications of those Directions depending upon circumstances.

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