The Reserve Bank of India (RBI) has imposed strict restrictions on Loknete RD (Appa) Kshirsagar Co-operative Bank in Nashik and Guwahati Co-operative Urban Bank in Assam due to serious financial concerns.
Under these directives, depositors’ ability to withdraw money is limited.
These measures came into effect from the close of business on Tuesday and will remain in place for six months.
Restrictions at Loknete RD (Appa) Kshirsagar Bank
In Nashik, the RBI has restricted deposit withdrawals and placed controls on the bank’s operations. Key points include:
Depositors cannot withdraw funds without prior permission.
The bank cannot grant new loans or renew existing loans.
No new investments, liabilities, or payments are allowed.
These steps are intended to prevent further deterioration of the bank’s financial situation.
Restrictions at Guwahati Co-operative Urban Bank
The RBI has also imposed restrictions on the Guwahati Cooperative Urban Bank in Assam.
Due to its weak financial position, customers can withdraw a maximum of ₹35,000 from their accounts.
The bank is also barred from issuing new loans, renewing existing ones, or making investments and payments without RBI approval.
These actions are meant to protect depositors’ interests while the bank works on strengthening its finances.
Insurance Protection for Depositors
In both cases, depositors are covered under deposit insurance up to ₹5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC).
This ensures that customers’ savings are protected even during financial stress.
The RBI has emphasized that depositors should remain patient and avoid panic while these measures are in place.
RBI’s Approach
The RBI has held multiple discussions with the bank management to address concerns and improve operations.
However, the regulators felt insufficient steps were taken to safeguard depositors’ interests, prompting these strict measures.
This move by the RBI ensures that banks operate safely, depositors’ funds are protected, and financial stability is maintained during challenging times.
