The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, provides insurance cover on bank deposits.
The Reserve Bank may consider modifications of the directions depending upon circumstances. (Photo: Getty)
The Reserve Bank on Friday imposed a Rs 1,000 withdrawal cap on customers of Karnataka-based Deccan Urban Co-operative Bank Ltd, citing lender’s financial position.
As of now, the cap of Rs 1,000 withdrawal is applicable for a period of six months. During this period, lender has also been asked not to make fresh investments or incur any liability without its prior permission.
“Considering the bank’s present liquidity position, a sum not exceeding Rs 1,000 (Rs One thousand only) of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI directions,” the RBI said.
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It said customers can set off their loans against deposits subject to conditions.
“However, 99.58 per cent of the depositors are fully covered by the DICGC insurance scheme,” said the regulator.
RBI has also asked the lender to desist from disbursing any payment whether in discharge of its liabilities or otherwise, or dispose of any of its assets except as notified in the RBI direction.
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, provides insurance cover on bank deposits.
The RBI further said putting the bank under restrictions should not be construed as cancellation of its banking license. The bank will continue to undertake banking business with restrictions till its financial position improves.
The Reserve Bank may consider modifications of the directions depending upon circumstances.
The directions are set to remain in force for six months from the close of business on February 19, 2021 and are subject to review, it added.
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