RBI caps deposit withdrawal from ailing National Co-operative Bank

RBI caps deposit withdrawal from ailing National Co-operative Bank: The Reserve Bank of India (RBI) imposed business restrictions on  The National Co-operative Bank Ltd and capped deposit withdrawal at Rs 50,000 per account in July 2023.

Daily Current Affairs Quiz: July 2023

The bank shall not grant or renew any loans and advances, make any investment, incur any liability including borrower of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets, RBI said in its directions. 

According to the RBI, the bank is not allowed to issue fresh loans or accept fresh deposits without prior approval from the central bank. Depositors will be entitled to receive deposit insurance claim amount up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation.

“The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances,” RBI said.