RBI New Action: RBI has fixed the deposit withdrawal limit from this bank at Rs 50,000. Also said that imposing business restrictions does not mean cancellation of banking license.
The Reserve Bank of India (RBI) has fixed the deposit withdrawal limit from the National Co-operative Bank Bengaluru at Rs 50,000. That is, the account holders of this bank cannot withdraw any amount above Rs.50,000. The central bank has taken this decision because of the weak financial position of the National Co-operative Bank. Along with this, the bank cannot issue any new loan nor can it accept fresh deposits without the approval of the central bank. The bank has around 13 branches in different parts of Bangalore.
The RBI has said that business restrictions have been imposed for a period of six months from the close of business on July 24, 2023, and are subject to review, Moneycontrol reported. Depositors of the bank can claim up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation under deposit insurance. However, RBI said that imposing business restrictions does not mean cancellation of banking licence. The RBI said the bank will continue to conduct banking business with restrictions till its financial position improves.
RBI had imposed fine in May
The Reserve Bank may consider modifications of these directions depending upon the circumstances. In May, RBI had imposed penalty on this bank citing violation of certain norms. RBI had said that the lender was charging fixed penal charges instead of proportionate to the limit for shortfall in maintenance of minimum balance in savings bank accounts.
As per the last annual report, as on March 31, 2021, the National Co-operative Bank had total deposits of Rs 1,679 crore and loans of Rs 1,128 crore. Data after that date is not available. Also, as per the annual report, the bank’s net NPA assets stood at 27.81 per cent as on March 31, 2021, while its capital adequacy ratio stood at 12.12 per cent.
