RBI sets restrictions on Babaji Date Mahila Sahakari Bank, capping withdrawals at Rs 5,000

RBI sets restrictions on Babaji Date Mahila Sahakari Bank, capping withdrawals at Rs 5,000 The RBI put multiple limitations on Maharashtra-based Babaji Date Mahila Sahakari Bank on Monday, including a Rs 5,000 withdrawal limit for customers, amid a deterioration in the lender's financial status. The Reserve Bank of India (RBI) announced in a statement that the limits imposed under the Banking Regulation Act 1949 will be in effect for six months, beginning on November 8, 2021, and will be reviewed. This is the latest incident of the central bank putting a stop to a cooperative bank. Following the restrictions, the bank will be unable to make new loans or receive new deposits until the end of operations on November 8, 2021, without prior approval from the RBI, according to the RBI. The cooperative bank cannot also disburse or agree to make any payment, enter into any compromise or arrangement, or sell, transfer, or otherwise dispose of any of its properties or assets without the RBI's approval. "Considering the bank's current liquidity position, a sum not exceeding Rs 5,000 from the total balance across all savings bank or current accounts or any other account of a depositor may be withdrawn," the statement said. "However, loans against deposits are permitted subject to the conditions stated in the above RBI directions." At the same time, the RBI said unequivocally that the issuance of directions should not be interpreted as the cancellation of a banking licence. Babaji Date Mahila Sahakari Bank Ltd will continue to conduct banking activity with limits until its financial status improves, and depending on the circumstances, the RBI may consider modifying the current restrictions.