RBI action: Restrictions imposed on Indian Mercantile Cooperative Bank Lucknow, limit on withdrawal of money

The Reserve Bank has imposed certain restrictions on the Indian Mercantile Cooperative Bank of Lucknow. However, the bank will be able to continue with its banking activities.

The Reserve Bank of India (RBI) has imposed certain restrictions on Indian Mercantile Cooperative Bank Ltd. Lucknow. These also include a limit of one lakh on withdrawal. RBI gave this information on Friday. These restrictions have come into effect with the end of trading hours on Friday.

In a statement regarding this, RBI said that this cooperative bank of Lucknow will not give new loans or advances nor will it be able to renew old loans without prior permission. Along with this, for making any kind of investment, it will also have to take prior permission from RBI.

Account holders will not be able to withdraw more than one lakh amount
“Specifically, no withdrawal of an amount exceeding Rs one lakh shall be permitted from all savings or current accounts or any other account of the depositor,” the statement said. However, RBI has also said that these instructions should not be construed as cancellation of its banking licence.

Bank will continue banking business along with restrictions
It said that the bank will continue to do banking business with restrictions till further notification of RBI. The Reserve Bank may consider amending these directions depending on the circumstances. These restrictions will be in effect for six months. The situation will be reviewed after six months.

In the past, eight cooperative banks were fined
Earlier on Monday, the RBI had said that it has imposed penalty on eight cooperative banks for deficiencies in regulatory compliance. Among these, a fine of Rs 4 lakh was imposed on Associate Cooperative Bank Ltd Surat, Rs 2 lakh on Mohavera Cooperative Bank Ltd Mumbai, Rs 2 lakh on Vasai Janata Cooperative Bank Palghar.

Apart from this, a fine of Rs 1 lakh has been imposed on Rajkot People’s Cooperative Bank, Rajkot, Rs 2 lakh on Bhadradri Cooperative Urban Bank, Rs 1 lakh each on Jammu Central Cooperative Bank Ltd, Jammu and Jodhpur Nagarik Sahakari Bank, Jodhpur. All these fines were based on deficiencies in regulatory compliance.