RBI caps savings account withdrawal limit to ₹5000 on these two banks
1 min read 25 Feb 2023, 07:50 PM ISTThe Reserve Bank of India (RBI) has restricted the withdrawal limit to ₹5,000 for savings and current account customers of Uravakonda Co-operative Town Bank and Shankarrao Mohite Patil Sahakari Bank Ltd.
PremiumThe Reserve Bank of India (RBI) has restricted the withdrawal limit to ₹5,000 for savings and current account customers of Uravakonda Co-operative Town Bank and Shankarrao Mohite Patil Sahakari Bank Ltd due to the poor liquidity position of these banks.
This restriction shall remain in force for a period of six months from the close of business on February 24, 2023 and are subject to review, according to RBI.
Without prior approval of RBI, Uravakonda Co-operative Town Bank and Shankarrao Mohite Patil Sahakari Bank Ltd shall not 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, said RBI in a statement.
“In particular, a sum not exceeding ₹5,000 (Rupees five 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the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn subject to the conditions stated in the above RBI Directions," said RBI in a circular.
The issue of the above directions should not per se be construed as cancellation of 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," said the central bank in a circular.
The eligible depositors would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakhs from the Deposit Insurance and Credit Guarantee Corporation, under the provisions of Section 18A of the DICGC Act (amendment) 2021, according to RBI.
The guidelines outlined in Section 35 A of the Banking Regulation Act of 1949 took effect at the conclusion of Friday's (February 24, 2023) business hour of Uravakonda Co-operative Town Bank and Shankarrao Mohite Patil Sahakari Bank.
