RBI imposes curbs on Bengaluru-based bank. Details here
Premium- The bank will continue to undertake banking business with restrictions till its financial position improves.
The Reserve Bank of India (RBI) on Thursday issued certain directions on Shushruti Souharda Sahakara Bank Niyamita, Bangalore. RBI has barred the bank from renewing or granting any loans and advances. Also, withdrawals in the bank's savings or current account should not exceed ₹5,000 of the total balance.
In a statement, RBI stated that from the close of business on April 07, 2022, the 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 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 except as notified in the RBI Direction.
Also, RBI said, "sum not exceeding ₹5,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn subject to the conditions stated in the above RBI Directions."
"The issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI," the central bank added, "the bank will continue to undertake banking business with restrictions till its financial position improves."
RBI may consider modifications of these directions depending upon circumstances.
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These Directions will remain in force for six months on the bank with effect from April 07, 2022, and are subject to review.
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