RBI imposes restrictions on 5 co-operative banks

The Reserve Bank of India on Friday imposed several restrictions on five cooperative banks, including on withdrawals, in the wake of the deteriorating financial condition of the lenders.

The restrictions will remain in place for six months, the Reserve Bank of India (RBI) said in separate statements.

With restrictions in place, the banks, without prior approval of RBI, cannot grant loans, make any investment, incur any liability, and transfer or otherwise dispose of any of its properties.

Customers of HCBL Co-operative Bank, Lucknow (Uttar Pradesh); Adarsh Mahila Nagari Sahakari Bank Maryadit, Aurangabad (Maharashtra); and Shimsha Sahakara Bank Niyamitha, Maddur, Mandya District in Karnataka cannot withdraw funds from their accounts due to present liquidity position of the three lenders.

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However, customers of Uravakonda Co-operative Town Bank, Uravakonda, (Anantapur District, Andhra Pradesh) and Shankarrao Mohite Patil Sahakari Bank, Akluj (Maharashtra) can withdraw up to Rs 5,000.

The eligible depositors of all the five cooperative banks would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation, RBI said.

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