The Reserve Bank of India (RBI) has placed strict restrictions on Mumbai-based Mogaveera Co-operative Bank due to concerns about its financial condition.
The move has been taken to protect customers’ money and ensure safer banking operations.
The restrictions came into effect after business hours on Friday and will remain in place for six months. However, the RBI will continue to review the situation from time to time.
Withdrawal limits imposed for customers
One of the most important changes for account holders is the withdrawal cap.
The RBI has now restricted customers from withdrawing more than ₹1 lakh from their savings, current, or other accounts.
This step has been taken to manage liquidity issues and ensure that the bank can maintain basic financial stability during the restriction period.
Banking activities completely restricted
Along with withdrawal limits, the RBI has also stopped the bank from carrying out several key banking operations.
For the next six months, the bank cannot:
Approve new loans or advances to customers
Renew existing loans
Make new investments
Take on any new financial liabilities
Accept fresh deposits
These restrictions significantly limit the bank’s ability to expand or take on new business until its financial condition improves.
Why RBI took this action
According to the RBI, it had been in continuous discussion with the bank’s board and senior management to fix operational and financial issues.
However, the bank did not take adequate steps to resolve the concerns or safeguard depositors’ interests.
As a result, the central bank was left with no option but to impose strict restrictions to protect customers’ funds and maintain trust in the banking system.
What this means for customers
For account holders, the key impact is limited access to funds and restricted banking services for the time being.
While day-to-day banking will continue in a controlled manner, customers will need to follow the RBI’s withdrawal limits and cannot expect new loans or fresh deposit services during this period.
The situation will be closely monitored over the next six months, and further updates will depend on the bank’s financial recovery.
