RBI imposes Rs.35,000 Withdrawal Limit on Gauhati Cooperative Urban Bank, What will happen now?
The Reserve Bank of India (RBI) has placed strict restrictions on The Gauhati Cooperative Urban Bank. The financial condition of the bank has weakened a lot, and the RBI had to intervene. From Tuesday evening, RBI has capped customer withdrawals at ₹35,000 per depositor. These restrictions will remain in force for six months.
As per RBI directions, the bank cannot issue or renew loans, make new investments, or take on fresh liabilities without prior approval. It also cannot make payments to settle its obligations, except as allowed under the restrictions.
RBI said the decision was taken due to the bank’s poor liquidity position. Customers can withdraw up to ₹35,000 from their savings, current, or other accounts. However, the bank is allowed to adjust loans against deposits, if applicable.
The central bank also revealed that it had been in talks with the bank’s board and senior management in recent months, asking them to improve operations and protect depositors. But due to lack of effective action, RBI was forced to step in.
There is some relief for customers. Eligible depositors can claim up to ₹5 lakh under deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
RBI clarified that these directions do not mean cancellation of the bank’s license. The bank will continue to operate, but only under the imposed restrictions.
The regulator said it will closely monitor the bank’s financial position and may change or relax the restrictions if the situation improves, keeping the interests of depositors in mind.
