The Reserve Bank of India (RBI) has taken action against Color Merchants Cooperative Bank, alongside fines imposed on SBI, Indian Bank, and Punjab and Sindh Bank.
These measures come as a response to the deteriorating financial condition of Color Merchants Cooperative Bank, based in Ahmedabad.
Withdrawal Limit Set at Rs 50,000
Effective from September 26, RBI has enforced several restrictions on Color Merchants Cooperative Bank.
For the next six months, customers of the bank will be limited to a maximum withdrawal of Rs 50,000.
Additionally, the bank cannot grant new loans or renew existing ones without prior permission from RBI.
It is also prohibited from making new investments and accepting fresh deposits.
RBI has emphasized that depositors cannot withdraw more than Rs 50,000 from their total bank deposits.
Deposit Insurance for Account Holders
The central bank assures account holders that they will be eligible for deposit insurance benefits from the Deposit Insurance and Credit Guarantee Corporation for deposits up to Rs 5 lakh.
Customers can seek more information from the bank officials. Furthermore, RBI clarifies that these actions do not amount to a cancellation of the bank’s license.
The bank will continue to operate under these restrictions until its financial condition improves.
RBI Deputy Governor’s Tenure Extended
In other news, the government has extended the tenure of RBI Deputy Governor M. Rajeshwar Rao for one year.
The Appointments Committee of the Cabinet approved his re-appointment, starting from October 9, 2023.
Rao initially assumed the role of Deputy Governor in October 2020 for a three-year term, following his service as the Executive Director of RBI.