1. The Reserve Bank of India (RBI) has put restrictions on cash withdrawals for the account holders of a bank in Bengaluru, Karnataka. RBI has issued certain directions to Sri Gururaghavendra Sahakara Bank Niyamitha (SGRSBN) bank, whereby, as from the close of business on January 10, 2020, the bank will not be able to grant or renew any loans and advances, make any investment, incur any liability, including borrowing of funds and acceptance of fresh deposits.
2. The banks have also been stopped from disbursing any payment whether in the discharge of its liabilities and obligations or otherwise, enters into any compromise or arrangement and sells. In particular, a sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account will only be allowed to be withdrawn. The maximum cash withdrawal limit for SGRSBN bank stands at Rs 35,000
3. The directions by the RBI should not be construed as a cancellation of a banking license by RBI. The bank will continue to do banking related business with restrictions until its financial position improves. As per RBI, the directions shall remain in force for a period of six months from the close of business of January 10, 2020, and are subject to review. The RBI had earlier issued written directions to the bank on January 2, 2020.
4. Sri Guru Raghavendra Sahakara Bank Niyamitha is an urban cooperative bank and As per the bank’s website, 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’.