RBI has imposed restrictions on Shankarrao Mohite Patil Sahakari Bank, Akluj in Maharashtra, due to the bank's declining financial position. As a result, customers of the bank are now limited to withdrawing no more than Rs 5,000 from their accounts. These restrictions are effective from the close of business on February 24, 2023, and will remain in place for six months, subject to review.In addition to the withdrawal limit, the bank is also prohibited from granting loans, making investments, incurring any liabilities, or transferring or disposing of any of its properties without prior approval from the RBI. These restrictions, issued under Section 35 A of the Banking Regulation Act, 1949, took effect at the close of business on Friday. RBI Restrictions on Shankarrao Mohite Patil
The RBI stated that a depositor may withdraw a maximum of Rs 5,000 from all their savings bank or current accounts or any other account. The issuance of these restrictions should not be interpreted as a cancellation of the bank's banking license, but rather as a temporary measure until the bank's financial position improves. The bank will continue to operate under these restrictions until it demonstrates an improvement in its financial position.Depositors who are eligible can receive up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation as a deposit insurance claim amount.
Section 35A within the Banking Regulation Act of 1949
Section 35A of the Banking Regulation Act of 1949 empowers the Reserve Bank, the central bank of India, to issue directives to banking institutions in certain circumstances. If the Reserve Bank is convinced that it is necessary to issue directives to banks in general or to any particular bank to safeguard the interests of depositors or the banking company, or to guarantee the effective management of any banking institution, it may do so from time to timeSuch directions, as deemed appropriate by the Reserve Bank, must be followed by the concerned banking institutions. If, however, any banking institution or institutions fail to comply with such directives, the Reserve Bank may impose penalties as it deems appropriate.Additionally, under subsection (2) of this section, the Reserve Bank may modify or revoke any directive it has issued, subject to any conditions it deems necessary to impose.
What is Deposit Insurance?
According to RBI, the Deposit Insurance and Credit Guarantee Corporation (DICGC) is a specialized entity of the Reserve Bank of India (RBI) that operates under the Ministry of Finance. It was established on July 15, 1978, following the enactment of the Deposit Insurance and Credit Guarantee Corporation Act of 1961. The main purpose of DICGC is to provide deposit insurance and credit guarantees to its customers. RBI Restrictions on Shankarrao Mohite Patil
DICGC offers insurance coverage for all types of bank deposits, such as savings, fixed, current, and recurring deposits. Each depositor in a bank can avail of coverage for up to Rs. 500,000. As of February 4, 2020, the coverage limit was increased from Rs. 100,000 to Rs. 500,000.This enhanced coverage has brought relief to many depositors who were previously limited to a lower level of protection. As a result of the revised limit, they can now rest assured that their deposits are well-insured and secure.For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true and top stories of the world.
RBI Restrictions on Shankarrao Mohite Patil
The RBI stated that a depositor may withdraw a maximum of Rs 5,000 from all their savings bank or current accounts or any other account. The issuance of these restrictions should not be interpreted as a cancellation of the bank's banking license, but rather as a temporary measure until the bank's financial position improves. The bank will continue to operate under these restrictions until it demonstrates an improvement in its financial position.
Depositors who are eligible can receive up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation as a deposit insurance claim amount.
RBI Restrictions on Shankarrao Mohite Patil
DICGC offers insurance coverage for all types of bank deposits, such as savings, fixed, current, and recurring deposits. Each depositor in a bank can avail of coverage for up to Rs. 500,000. As of February 4, 2020, the coverage limit was increased from Rs. 100,000 to Rs. 500,000.
This enhanced coverage has brought relief to many depositors who were previously limited to a lower level of protection. As a result of the revised limit, they can now rest assured that their deposits are well-insured and secure.
For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true and top stories of the world.
