Mumbai: The Reserve Bank has imposed several restrictions on Mogaveera Co-operative Bank, Mumbai, including capping withdrawals at Rs 1 lakh, amid its deteriorating financial position.
The restrictions are effective from the closure of business hours on Friday for a period of six months and are subject to review, the Reserve Bank of India (RBI) said in a statement.
The cooperative bank cannot grant or renew any loans and advances, make any investment, incur any liability, including borrowing of funds and acceptance of fresh deposits, the statement added.
"Considering the bank's present liquidity position, the bank has been directed to permit withdrawal of a sum not exceeding Rs 1 lakh from savings bank or current accounts or any other account of a depositor ...," it added.
RBI continuously engaged with the Board and senior management of the bank for improvement in its functioning, the central bank said.
"However, lack of concrete efforts by the bank to address the supervisory concerns and to protect the interest of depositors of the bank, necessitated issuance of these Directions," it added.
The RBI also said that the issue of the directions should not per se be construed as cancellation of the banking licence by the RBI.
"The bank will continue to undertake banking business subject to restrictions specified in the said Directions till its financial position improves," it added.
The RBI further said it will continue to monitor the position of the bank and take necessary actions, including modifications of the directions, as warranted, depending upon circumstances and in the interest of the depositors.
The eligible depositors would be entitled to receive the deposit insurance claim amount of their deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The depositors may contact the bank officials for further information, the RBI added.
