The Reserve Bank of India (RBI) has announced that it has raised the withdrawal limit for City Co-operative Bank depositors to Rs.5,000. This comes as a welcome relief for customers who have been facing issues due to their restricted withdrawal limit. In its directive, RBI noted that this increased withdrawal limit is applicable to savings accounts, current accounts, and any other kind of deposits.
In April, the RBI imposed a restriction that City Co-operative Bank customers can withdraw only up to Rs.1,000 from their accounts and other deposits. This was imposed in response to the bank’s weakening financial position. This restriction has been extended from time to time in the form of different directives over the last few months. In the previous directive issued on 15 October 2018, RBI issued directions to continue with the restrictions.
This increase in withdrawal limit is also subject to further conditions that the depositor has no outstanding loans in the bank. If the depositor has outstanding loans, the money in the accounts may be adjusted against the relevant loan. In addition to borrowers, this condition is also applicable to those who have provided surety for other borrowers.
While the withdrawal limit has been relaxed, RBI noted that this cannot be construed to indicate that the financial performance of City Co-operative Bank is satisfactory. This is mainly done to help customers who are affected by the RBI’s directive.
The increase in withdrawal limit comes as a welcome move for customers. However, the bank is still likely to face the other restrictions imposed by the Reserve Bank. As per the original directive, the City Co-operative Bank cannot grant any new loans or make new investments without the approval from RBI. The restriction also prevented the bank from selling and transferring its assets without the explicit approval from RBI.
Source: Economic Times