RBI Imposes Curbs On Maharashtra-based Babaji Date Mahila Sahakari Bank

RBI on Monday imposed several restrictions on Maharashtra-based Babaji Date Mahila Sahakari Bank, including capping withdrawals at Rs 5,000 for customers, amid deterioration in the lender's financial position.

The restrictions under the Banking Regulation Act 1949, will remain in force for six months from the close of business on November 8, 2021, and are subject to review, Reserve Bank of India (RBI) said in a statement.

According to the central bank, Babaji Date Mahila Sahakari Bank, Yavatmal, should not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, and incur any liability. The liability part includes borrowing of funds and acceptance of fresh deposits.

Without RBI's nod, the cooperative bank cannot also disburse or agree to disburse any payment, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets.

"Considering the bank's present liquidity position, a sum not exceeding Rs 5,000 from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI directions," the statement said.

At the same time, RBI made it clear that the issue of directions should not per se be construed as cancellation of banking license.

Babaji Date Mahila Sahakari Bank Ltd will continue to undertake banking business with restrictions till its financial position improves and depending on the circumstances, RBI might consider modifications to the current restrictions.

Separately, RBI has extended the restrictions imposed on Millath Co-operative Bank Limited, Davangere, Karnataka, for another three months till February 7, 2022.

The restrictions on the Karnataka-based cooperative bank were imposed on April 26, 2019, and have been modified from time to time. Last time, the restrictions were extended till November 7.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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