The Reserve Bank of India (RBI) has imposed strict restrictions on Mumbai-based Mogaveera Co-operative Bank due to its weak financial condition. The move has raised concerns among the bank’s customers, especially depositors.
Under the new rules, account holders can withdraw a maximum of ₹1 lakh from their savings, current, or any other account. These restrictions will remain in force for six months and may be reviewed by the RBI from time to time.
What Restrictions Has RBI Imposed?
According to the RBI, the restrictions came into effect after the close of business on Friday.
The bank will not be allowed to:
Grant new loans or advances
Renew existing loans
Make fresh investments
Take on new financial liabilities
Borrow funds
Accept fresh deposits
The central bank said the withdrawal limit has been imposed considering the bank’s current liquidity position. As a result, each depositor can withdraw only up to ₹1 lakh during the restriction period.
RBI Monitoring the Situation Closely
The RBI said it has been in regular contact with the bank’s board of directors and senior management to improve the bank’s financial health.
However, the central bank noted that the bank failed to take effective steps to address regulatory concerns and safeguard depositors’ interests. Because of this, RBI decided to impose these restrictions.
Banking Licence Remains Valid
The RBI has clarified that the bank’s banking licence has not been cancelled.
Mogaveera Co-operative Bank can continue its banking operations, but it must function under the restrictions imposed by the RBI. The central bank will continue to monitor the bank’s financial condition and review the situation periodically.
