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RBI imposes restrictions on Mumbai-based Bank, caps withdrawal amount

On Monday Reserve Bank of India imposed several directions to Raigad Sahakari Bank Mumbai. These constraint include an upper limt on withdrawal cap of ₹15,000 per customer, cause of decline in the financial condition of the lender.

“A sum not exceeding Rs 15,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn,” said the central bank in a statement on Monday.

Further, from the close of business on Monday, the bank shall not, without prior approval of the RBI, 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 the 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, by economic times.

Without the prior approval of RBI, cannot issue loans, make any investment, accept fresh deposits, among the restrictions, said to the cooperative bank by RBI.

All of the restrictions will remain in force for a period of six months.

“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,” it added.

The RBI further said the management isuued to Raigad Sahakari Bank should not per se be construed as cancellation of banking license.
Reportedly, the Mumbai-based bank is going through financial stress.

The RBI said a penalty of ₹6 lakh was levied on Shri Chhatrapati Rajarshi Shahu Urban Co-operative Bank Limted, Beed, for contravention of provisions related to ’Frauds- classification and Reporting’.

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