Pune Sahakari Bank Prohibited From Granting Loans, Accepting Deposits Without RBI Approval
Sumit Singh
Pune, 13th March 2023: The Reserve Bank of India (RBI) has issued directions to Pune Sahakari Bank Ltd. in Shivajinagar, Pune, restricting the bank’s operations.
The bank shall not grant or renew any loans and advances, make any investments, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment, enter into any compromise or arrangement, and sell, transfer or dispose of any properties or assets without prior approval of RBI in writing.
The directive came into effect from the close of business on March 10, 2023. As per the RBI directions, eligible depositors can withdraw a sum not exceeding Rs 10,000 from the total balance across all savings bank, current accounts, or any other account, subject to conditions stated in the directive. Furthermore, depositors may contact their bank officials for information on deposit insurance claims. Eligible depositors will receive deposit insurance claim amounts up to a monetary ceiling of Rs five lakh from the Deposit Insurance and Credit Guarantee Corporation under Section 18A of the DICGC Act (amendment) 2021, based on their willingness to submit.
The RBI clarified that the issuance of the directions should not be construed as the cancellation of the bank’s banking license. The bank will continue to operate with restrictions until its financial position improves. The Reserve Bank may consider modifying the directions depending on circumstances. The directions shall remain in force for six months from the close of business on March 10, 2023, and are subject to review.
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