The Reserve Bank of India (RBI) has placed restrictions on Sri Guru Raghavendra Sahakara Bank, which includes a withdrawal limit of Rs 35,000 for customers. The Bengaluru-based private lender cannot issue new loans or make any new investments without prior approval from the banking regulator for the next six months.
The curbs do not mean that the bank’s banking licence will be revoked, RBI clarified. The banking regulator has placed restrictions starting from the close of business on January 10.
“A sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn,” the RBI said in a press release. “The bank will continue to undertake banking business with restrictions till its financial position improves,” it bank added.
The instructions were issued under Section 35 A of the Banking Regulation Act, 1949.
Following RBI’s directive, Sri Guru Raghavendra Sahakara Bank sent a message to its customers, The Times of India reported. “We wish to request depositors and shareholders that they need not panic. We assure the depositors that their money is safe and we will call for a depositors and shareholder meet shortly,” the message said.
The bank’s management will contact RBI on January 13, the report added.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
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