The Reserve Bank of India made a restriction on Karnataka-based Deccan Urban Co-operative Bank Ltd from granting fresh loans or accepting deposits from the public from 19.02.2021 onwards. And customers cannot withdraw more than Rs 1,000 for a period of six months from a savings account or current account or any other account of a depositor. The lender has also been asked not to make fresh investments or incur any liability without its prior permission.
The lender has also been asked not to make fresh investments or incur any liability without its prior permission. The RBI said it issued the directions to the chief executive officer of the bank on Thursday (February 18). The RBI has also asked the lender to desist from disbursing any payment whether in the discharge of its liabilities or otherwise or dispose of any of its assets except as notified in the RBI direction.
“Considering the bank’s present liquidity position, a sum not exceeding Rs 1000 only of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn,” RBI said in a release on Friday.
It said customers can set off their loans against deposits subject to conditions. “However, 99.58 percent of the depositors are fully covered by the DICGC insurance scheme,” said the regulator.
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, provide insurance cover on bank deposits.
The RBI informed that putting the bank under restrictions should not be construed as a cancellation of its banking license. The directions are set to remain in force for six months from the close of business on February 19, 2021.