RBI said in a statement on Tuesday that all the guidelines issued earlier will remain the same during the extension of three months. The central bank had first banned this cooperative bank in May 2019.
The Reserve Bank of India ( RBI) on Tuesday extended the restrictions on Milath Co-Operative Bank based in Devangare, Karnataka for another three months till May 7, 2022. Earlier, as per the guidelines issued on May 10, 2019, the withdrawal limit from each account was fixed at Rs 1,000.
This restriction has been extended from time to time. RBI said in a statement on Tuesday that all the guidelines issued earlier will remain the same during the extension of three months. Let us tell you that for the first time in May 2019, RBI banned this cooperative bank.
After this the ban was extended to 7 May 2021. In May 2021, the RBI again extended the ban for three months to 8 August 2021. After this, in August, once again the ban was extended till 7 November 2021. It was last extended till February 2022.
Banks will not be able to do this work without the approval of RBI
According to the instructions, the co-operative bank will not be able to give any new loan nor make any new investment or take any liability without the approval of RBI. Along with this, it will not make any investment, nor will it be able to borrow money nor will it be able to approve new deposits.
RBI canceled the license of this cooperative bank
Earlier this month, the central bank canceled the license of Independence Co-Operative Bank Ltd, located in Maharashtra’s Nashik city, earlier this month. The bank also asked to take steps regarding returning the deposits of the customers under the rule.
RBI has said in its decision that the bank does not have enough capital and there is no prospect of earning further in the future. In such a situation, canceling the license is in the interest of the customers.
According to the order of RBI, deposits up to Rs 5 lakh will be returned to the customers of the bank under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
According to the bank’s data, here 99 percent of the account holders are entitled to get their full amount i.e. 5 lakh or less amount is deposited in their bank account. In such a situation, only 1 percent of the customers will be affected by the decision to cancel the bank.
Indian Mercantile Cooperative Bank banned
The RBI last month imposed a number of restrictions on Indian Mercantile Cooperative Bank, in which the withdrawal limit has also been imposed. Now no more than Rs 1 lakh can be withdrawn from the bank.
According to the order, the restrictions on Indian Mercantile Cooperative Bank will continue for the next 6 months, after which they will be reviewed and then any further decision will be taken.
Last month, the Reserve Bank imposed a penalty on eight cooperative banks for deficiencies in regulatory compliance.
