RBI Imposed Restrictions on Withdrawal Limit Up to 1 Lakh of Indian Mercantile Cooperative Bank Limited

The Reserve Bank of India has put many limitations on Indian Mercantile Cooperative Bank Limited, including a Rs.1 lakh withdrawal cap. These limits, according to the RBI, took effect on January 28, 2022, during business hours (Friday). The Lucknow-based co-operative bank will not extend or renew any loan, advance, or make any investment without the RBI’s clearance, according to a statement.

No depositor of the bank would be allowed to withdraw more than one lakh rupees from their total balance in savings, current, or other accounts, according to the RBI. The central bank, however, stated that these prohibitory directives should not be interpreted as a termination of the RBI’s banking licence.

Previously, the Reserve Bank of India fined Varachha Sahakari Bank Ltd., Surat, Rs.1 lakh for violating certain Depositor Education and Awareness Fund Scheme, 2014 standards, and Mogveera Co-operative Bank Ltd., Mumbai, Rs.2 lakh for non-compliance with certain KYC norms. A monetary fine of Rs.2 lakh was also levied on Vasai Janata Sahakari Bank, Palghar, at the same time.

Rajkot People’s Co-operative Bank, Rajkot was fined Rs.1 lakh by the Reserve Bank of India for violating the directives on ‘Loans and advances to directors, relatives, and firms/entities in which they are interested.’ Bhadradri Co-operative Urban Bank was fined Rs.2 lakh by the Reserve Bank of India. For violating certain standards, Jammu Central Co-operative Bank Ltd., Jammu, and Jodhpur Nagarik Sahakari Bank, Jodhpur were each fined one lakh rupees.

The RBI, on the other hand, stated that the penalty is based on regulatory compliance issues and does not call into doubt the legitimacy of any transaction or agreement entered into by banks with their customers.