The Reserve Bank of India (RBI) on November 8 imposed strict restrictions on business activities on Maharashtra-based Babaji Date Mahila Sahakari Bank including imposing a withdrawal limit of Rs 5,000 for depositors.
This is the latest instance of the central bank clamping down on a co-operative bank.
Following the restrictions, from the close of business on November 8, 2021, the bank cannot issue new loans or accept fresh deposits without RBI’s prior approval, the RBI said.
Also, a withdrawal limit of Rs. 5000 was imposed for all depositors, the RBI said.
“Considering the bank’s present liquidity position, a sum not exceeding Rs5000 from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions,” the RBI said.
The issue of the above directions by the RBI should not be construed as cancellation of banking license by RBI, the central bank said.
The bank will continue to undertake banking business with restrictions till its financial position improves, the RBI said. Also, the Reserve Bank may consider modifications of these Directions depending upon circumstances, a statement from the RBI added.
These directions will remain in force for a period of six months from the close of business on November 8, 2021, the RBI said.