Yet another bank on RBI restriction, depositors can’t withdraw more than Rs 50,000 of total balance across all accounts

New Delhi: The Reserve Bank of India (RBI) has put restriction on yet another bank, barring its depositors to withdraw not more than Rs 50,000 of total balance across all accounts.

RBI has issued certain Directions to Garha Co-operative Bank Ltd., Guna, whereby, as from the close of business on February 24, 2021, the Administrator 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 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 except as notified in the RBI Direction dated February 23, 2021 a copy of which is displayed on the bank's premises for perusal by interested members of the public. 

Considering the bank's present liquidity position, a sum not exceeding Rs 50,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but bank is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions.

In the bank, 99.40% of the depositors are fully covered by the DICGC insurance scheme, the RBI said.

RBI added that 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.

These Directions shall remain in force for a period of six months from the close of business on February 24, 2021 and are subject to review, the central bank added.