After Lakshmi Vilas Bank, RBI imposes withdrawal limit on THIS bank
After Lakshmi Vilas Bank, RBI imposes restrictions on withdrawal from THIS bank
Image Source : FILE PHOTO After Lakshmi Vilas Bank, RBI imposes restrictions on withdrawal from THIS bank

Reserve Bank of India on Tuesday imposed restrictions on withdrawals from Maharashtra-based Mantha Urban Cooperative Bank for six months. The RBI, in a launch, stated it has issued sure instructions to Mantha Urban Cooperative Bank, Mantha District Jalna, Maharashtra, from the shut of enterprise on November 17, 2020.

As per the instructions, the bank is not going to, with out prior approval of RBI in writing, grant or renew any loans and advances, make any funding, incur any legal responsibility together with borrowal of funds and acceptance of contemporary deposits, disburse or comply with disburse any cost, amongst others.

“In particular, no deposit of the total balance across all savings bank or current account or any other account of a depositor may be allowed to be withdrawn” topic to circumstances said within the instructions, the central bank stated. The instructions will stay in drive for a interval of six months from the shut of enterprise of November 17, 2020, and are topic to evaluation, it added.

It additional stated the difficulty of the instructions by the RBI shouldn’t per se be construed as cancellation of banking license by RBI. The bank will proceed to undertake banking enterprise with restrictions until its monetary place improves, the central bank stated, and added it might contemplate modifications of the instructions relying upon circumstances.

In a separate launch, RBI stated it has imposed a financial penalty of Rs 20 lakh on Bengaluru-based Shushruati Souharda Sahakara Bank Niyamita for deficiencies in regulatory compliance. The central bank additionally imposed a penalty of Rs 1 lakh on The Deccan Urban Co-operative Bank, Vijayapura, Karnataka, for contravention of the instructions issued by it on the prohibition of loans and advances to administrators.

RBI places Lakshmi Vilas Bank beneath moratorium

The authorities on Tuesday imposed a 30-day moratorium on Lakshmi Vilas Bank, proscribing money withdrawals at Rs 25,000 per depositor, and concurrently introduced a scheme to merge the cash-strapped lender with DBS India. The step was taken on the recommendation of the Reserve Bank in view of the non-public sector bank’s deteriorating monetary well being.

The Reserve Bank additionally outmoded the board of Lakshmi Vilas Bank (LVB) and appointed T N Manoharan, former non-executive chairman of Canara Bank, as its administrator for 30 days. The RBI positioned within the public area a draft scheme of amalgamation of LVB with DBS Bank India Ltd (DBIL).

DBS Bank India, in a press release, stated the proposed amalgamation will present stability and higher prospects to LVB’s depositors, prospects and workers.

(With PTI inputs)

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