RBI restricts People’s Co-operative Bank customers from money withdrawal

The Reserve Bank of India (RBI) has barred Kanpur-based People’s Co-operative Bank from approving any fresh loans and accepting deposits for six months, due to the lenders weak financial position.

The RBI also restricted withdrawals of money from depositors of the co-operative bank.

RBI“As from the close of business on June 10, 2020, 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 discharge of its liabilities and obligations or otherwise,” the RBI said in a release.

Besides, the central bank has stopped the co-operative bank from selling, transferring or disposing any of its properties or assets.

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“In particular, no amount 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the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn,” the central bank said.

These directions will be effective for six months from the close of business on June 10 and are subject to review by the banking regulator, it said.

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The central bank, however, clarified that the directions should not be perceived as the revoking of banking licence of the co-operative bank.

The lender will continue to run banking business with imposed restrictions till its financial position gets better, it said

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