The RBI has approved a maximum of 1 thousand rupees for withdrawal from accounts. (Image- Reuters)
Withdrawal from PMC Bank, Laxmi Vilas Bank and Matha Urban Corporate Bank has been limited to withdrawal from another bank in the same manner as RBI had set the limit. The Reserve Bank of India (RBI) has banned the withdrawal of more than 1 thousand rupees from any type of account including savings and current account in Deccan Urban Cooperative Bank. The central bank has taken this decision to improve the liquidity position of the bank. According to the RBI decision, this moratorium will continue for six months. This decision has been effective since the close of business on 19 February.
Apart from the withdrawal limit, Deccan Urban Cooperative Bank in Karnataka has been banned from granting or renewing any loans and advances. The bank has also been banned from making new investments. Neither the bank can borrow any fund nor can take fresh deposit. No one can pay.
Banking business will continue with restrictions
The RBI has approved a maximum of Rs 1,000 for withdrawal from accounts, but the central bank has allowed the depositors to set off loans through their deposits under certain circumstances. The RBI has also made it clear that the instructions issued to Deccan Urban Cooperative Bank should not be deemed to be revoked. According to RBI, Deccan Urban Cooperative Bank will continue banking business with some restructuring till its financial condition improves.
RBI has already taken action before
In November last year, RBI imposed a penalty of Rs 1 lakh on Deccan Urban Cooperative Bank. This was imposed in violation of the instructions issued by the central bank in case of penalty and advances to directors of penalty bank. The central bank had earlier reduced withdrawal limit from Yes Bank to Rs 50 thousand. Withdrawal limit was also increased from PMC bank to Rs 50 thousand, which was later increased to Rs 1 lakh. Withdrawal from Lakshmi Vilas Bank also limited RBI to cap Rs 25,000 per account