Economy News

RBI trackdown on co-operative Banks worry customers

Over the past few weeks, RBI has tracked down cooperative banks and imposed strict regulations due to the banking sector’s sinking health.

Considering the Deccan Urban Co-operative Bank’s liquidity position, RBI has imposed a withdrawal limit of Rs 1,000 per borrower.

Moreover, the withdrawal limit will be imposed for a period of 6 months.

Maharashtra-based Vasantdada Nagari Sahakari Bank also witnessed a similar fate on January 11.

RBI had cancelled the bank’s license as it was unable to pay it’s depositors with it’s current financial position.

Due to frequent occurrence of instances like this, customers who deposit money in these banks are worried.

Further, resolution in such matters takes a very long period of time.

Previously, RBI also imposed restrictions on withdrawals from the Punjab and Maharashtra Cooperative (PMC) Bank, one of the largest urban cooperative lenders.

It superseded the Board of PMC Bank in September 2019, after imposing a deposit withdrawal limit of Rs 1,000.

At present, the resolution is still pending and the withdrawal limit rose to Rs 100,000 in June 2020.

This is to ensure that 84 percent depositors can withdraw their entire money from the bank.

As per reports, PMC Bank will soon get an investor even though its depositors continue to suffer.

The PMC Bank had more than 98 lakh depositors on board.

Last year, RBI issued 106 directives on different co-operative banks and cancelled four bank permits.

This includes Karad Janata Sahakari Bank, CKP Cooperative Bank, Mapusa Urban Co-operative Bank of Goa and Vasantdada Nagari Sahakari Bank.

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