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RBI restricts withdrawals on savings, current accounts of this bank

By Livemint
The issue of the Directions by should not per se be construed as cancellation of banking license by RBI.  (REUTERS)

In a statement, RBI said it "has issued certain Directions to Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur, whereby, as from the close of business on May 13, 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 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 notified in the RBI direction dated May 13, 202."

Also, RBI said, considering the bank's present liquidity position, no amount from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions.

However, RBI also mentioned that 99.84% of the depositors are fully covered by the DICGC insurance scheme.

"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 said.

Further, the statement added, "the bank will continue to undertake banking business with restrictions as stated in the Directions till its financial position improves. The Reserve Bank may consider modifications of these directions depending upon circumstances."

A copy of the directions has been displayed on the bank's premises and website for perusal by interested members of the public.

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