Another PMC Bank: RBI steps in to curb withdrawal limit, assures depositors at the same time

By: |
Published: January 14, 2020 12:07 PM

The license of the crisis-hit Sri Gururaghavendra Sahakara Bank Niyamitha (SGRSBN) bank in Bengaluru has not been cancelled and it can continue to undertake banking business with restrictions till its financial position improves, RBI said.

The central bank in September had imposed restrictions on the PMC Bank for six months on account of financial irregularities.

The license of the crisis-hit Sri Gururaghavendra Sahakara Bank Niyamitha (SGRSBN) bank in Bengaluru has not been cancelled and it can continue to undertake banking business with restrictions till its financial position improves, Reserve Bank of India (RBI) said. It comes days after the RBI capped the withdrawal limit for the account holders at Rs 35,000. On January 10, 2019, the RBI had imposed certain restrictions on SGRSBN. “As from the close of business on January 10, 2020, the aforesaid bank shall not… grant or renew any loans and advances, make any investment… In particular, a sum not exceeding ₹35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions” the RBI said.

The central bank in September had imposed restrictions on the Punjab & Maharashtra Co-operative (PMC) Bank for six months on account of financial irregularities. The withdrawal limit was capped to Rs 1,000 which was later increased to Rs 50,000. Similar to SGRSBN, long queues of depositors were reported outside the PMC Bank. The central bank had also asked the bank not to give or renew any loans.

Also read: Market LIVE: Sensex, Nifty slump in early trade; TCS turns it around to top Sensex pack

Meanwhile, SGRSBN is an urban cooperative bank and the central bank issued directions in the exercise of powers vested in it under sub section (1) of Section 35 A of the Banking Regulation Act, 1949, read with Section 56 of the Banking Regulation Act, 1949 (AACS). The rate of interest on deposits of ‘1 year to less than 2 years’ was 8 per cent per annum and 8.5 per cent per annum on deposits of ‘2 years up to 5 years’, according to the website of the bank.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1RBI has its hands full with Urban Cooperative Banks now unambiguously its responsibility
2Anil Ambani’s Reliance Infra defaults seven times to Yes Bank since February
3NPA crisis: When it comes to loan losses, PSBs are far ahead of private banks – Check numbers