RBI puts Rs 1,000 withdrawal limit on Deccan Urban Co-op Bank

The Reserve Bank of India (RBI) on Friday said it has barred Karnataka-based Deccan Urban Co-operative Bank Ltd from granting fresh loans or accepting deposits and customers cannot withdraw more than ₹1,000 from their savings account for a period of six months.

The lender has also been asked not to make fresh investments or incur any liability without its prior permission. The RBI said it issued the directions to chief executive officer of the bank on Thursday (February 18).

“Considering the bank’s present liquidity position, a sum not exceeding ₹1000 only of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn,” RBI said in a release on Friday.

“However, 99.58 per cent of the depositors are fully covered by the DICGC insurance scheme,” said the regulator. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, provides insurance cover on bank deposits.

The directions are set to remain in force for six months from the close of business on February 19, 2021 and are subject to review, it added.