RBI imposes restrictions on New Delhi-based Ramgarhia Co-op Bank

The RBI on Friday imposed several restrictions on New Delhi-based Ramgarhia Co-operative Bank, including a cap of Rs 50,000 on withdrawal per depositor, in view of the lender's deteriorating financial condition.

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The restrictions came into effect after the close of business on Friday and will remain in force for six months, the Reserve Bank said in a statement while issuing the directions under the Banking Regulation Act, 1949.

The bank cannot, without prior approval of the RBI, grant or renew any loans, make investments or accept fresh deposits.

"In particular, a sum not exceeding Rs 50,000 of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn...," the RBI said.

It, however, said these directions to Ramgarhia Co-operative Bank should not per se be construed as cancellation of banking licence by the RBI.

"The bank will continue to undertake banking business with restrictions as stated in the Directions till its financial position improves," it added.

The Reserve Bank further said it may consider modifications of the directions depending upon circumstances.