RBI Imposes Strict Restrictions on Baghat Urban Co-operative Bank: Withdrawal Limit Set at ₹10,000
The Reserve Bank of India (RBI) has taken strict regulatory action against The Baghat Urban Co-operative Bank Ltd., located in Solan, Himachal Pradesh. As per the central bank’s directive, the bank can no longer accept new deposits or issue new loans. Additionally, it has been barred from meeting its financial obligations without prior written permission from the RBI.
What Do RBI’s Directives Say?
The RBI stated that without its prior written approval, the bank cannot grant any new loans, accept new deposits, or fulfill any financial commitments. This move follows the discovery of serious financial irregularities during a recent inspection.
According to a report by PTI, considering the bank’s current liquidity position, the RBI has capped withdrawals at ₹10,000 per depositor. However, the bank is allowed to adjust customers’ deposits against any outstanding loans they may have.
What About Deposit Insurance Protection?
RBI also clarified that the bank’s depositors are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme. Under this provision, each depositor is insured up to ₹5 lakh, depending on their account balance and eligibility.
Not a License Cancellation
The central bank emphasized that these restrictions do not amount to the cancellation of the bank’s license. The Baghat Urban Co-operative Bank can continue to operate under limited conditions.
RBI’s move aims to stabilize the bank’s financial condition and safeguard the interests of its depositors.
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