RBI imposes restrictions on Raigad Sahakari Bank, caps customer withdrawals

The RBI imposed several restrictions on Mumbai-based Raigad Sahakari Bank, including a withdrawal cap of Rs 15,000 per customer, due to deterioration in the financial condition of the lender

The RBI on Monday imposed several restrictions on Mumbai-based Raigad Sahakari Bank, including a withdrawal cap of Rs 15,000 per customer, due to deterioration in the financial condition of the lender.

The cooperative bank, without the prior approval of RBI, cannot issue loans, make any investment, accept fresh deposits, among the restrictions.

"In particular, 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the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn," the Reserve Bank said in a statement.

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

The RBI further said the directions issued to Raigad Sahakari Bank should not per se be construed as cancellation of banking license.

"The bank will continue to undertake banking business with restrictions till its financial position improves," it said.

The Reserve Bank also said it may consider modifications of the directions depending upon circumstances.

In another statement, the RBI said a penalty of Rs 6 lakh on Shri Chhatrapati Rajarshi Shahu Urban Co-operative Bank Limited, Beed, for contravention of provisions related to 'Frauds - Classification and Reporting'.