RBI puts curbs on Malkapur Urban Co-operative Bank

Mumbai, November 24

The RBI on Wednesday imposed several restrictions, including a Rs 10,000-cap on withdrawals, on Malkapur Urban Co-operative Bank in Maharashtra due to deterioration in its financial position.

Malkapur Urban Co-operative Bank shall not without prior approval of the RBI renew any loans, make any investment, incur any liability, and disburse any payment, the Reserve Bank of India said in a statement.

“In particular, a sum not exceeding Rs 10,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn...,” it added.

The restrictions would remain in force for six months from the close of business on Wednesday.

The central bank, however, added that the issue of the directions to the co-operative banks should not per se be construed as a cancellation of banking licence.

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

The Reserve Bank may consider modifications of these directions depending upon circumstances, the statement added. — PTI

Restrictions to remain in force for 6 mths

• According to the RBI, the bank shall not, without its prior approval, renew any loans, make any investment, incur any liability, and disburse any payment
• The restrictions would remain in force for six months from the close of business on Wednesday
• However, the bank will continue to undertake business with restrictions till its financial position improves