India’s banking system continues to deteriorate and one bank after another has been placed under strict sanctions by India’s central bank, the RBI. Which is the biggest problem for account holders as their precious savings get stuck in the bank.
The RBI has now banned one more co-operative bank. The RBI has recently ordered the imposition of sanctions on Garha Co-operative Bank Ltd. According to the RBI order, the bank’s management cannot issue any grant, issue a new loan or renew a loan without the written approval of the Reserve Bank.
The management of Garha Co-operative Bank Ltd will not be able to make any new investments, taking any kind of deposits is also prohibited. The bank management will not be able to sell or transfer any assets till the order of the Reserve Bank. These restrictions on the bank will be in force for the first 6 months after February 24, 2021, which will also be reviewed.
Considering the current financial condition of Garha Co-operative Bank Ltd, the Reserve Bank has also set a withdrawal limit of Rs 50,000 for depositors. That is, no more than Rs 50,000 can be withdrawn from all savings accounts, current accounts or any other type of account. However, the Reserve Bank has assured that 99.40 per cent of the bank’s depositors’ money is fully protected under the DICGC insurance scheme.
Earlier, several banks were also banned from issuing new loans to Deccan Urban Co-operative Bank Limited, a co-operative bank in Karnataka, on February 19, before Independence Co-operative Bank Limited in Nashik was also banned.