RBI puts curbs on Kapol Bank withdrawals

MUMBAI: The Reserve Bank of India on Friday barred depositors of The Kapol Co-operative Bank from withdrawing more than Rs 3,000 from their savings and current bank accounts.

The regulator also said the co-operative bank will also not be able to grant or renew any loans or advances without prior approval in writing from the central bank.The bank will also not make any investment, incur any liability , including borrowal of funds, and accept fresh deposits without RBI's approval. Despite these fresh restrictions, RBI said the latest notification should not be construed as a cancellation of the bank's licence.

“The issue of the directions by the Reserve Bank should not, per se, be construed as cancellation of banking licence by the Reserve Bank,“ the regulator said. “The bank will continue to undertake banking business with restrictions till its financial position improves.“ The regulator also said that it may consider modifications of these directions depending on the circumstances.