Bengaluru co-op bank can continue banking business with restrictions till its financial position improves: RBI

On Monday, depositors queued up outside Sri Guru Raghavendra Co-operative Bank, in Bengaluru. This come after Reserve Bank of India (RBI) restricted the bank from doing business with immediate effect and capped withdrawal limit at Rs 35,000.

But, the RBI has now said that the licence of the bank has not been cancelled, it can continue to "undertake banking business with restrictions till its financial position improves", reported news agency ANI.

RBI had, on January 10, imposed certain restrictions on Sri Gururaghavendra Sahakara Bank Niyamitha. "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35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions stated in the above RBI directions," the notification said.

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The regulatory body said that the bank will continue to undertake banking business with restrictions until its financial position improves. "These directions shall remain in force for a period of six months from the close of business of January 10 and are subject to review," it said.

The bank has been restricted from granting or renewing any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except.

(Inputs from Agencies)