RBI places Bengaluru's urban co-op bank under curbs

RBI places Bengaluru's urban co-op bank under curbs

Representative image. (Photo: WikiMedia Commons)

The depositors, owning money worth Rs 1,565.62 crore, of the city-based urban co-operative bank (UCB) Sri Gururaghavendra Sahakara Bank Niyamith were left in the lurch as the Reserve Bank of India placed curbs on deposit withdrawals from the UCB.

The central bank has barred anyone from withdrawing more the Rs 35,000 from any account.

"A sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions stated in the above RBI Directions,' the RBI said.

The apex bank also barred the UCB from granting any loans amid concerns over high bad loans in the bank. 

"The aforesaid bank shall not, without prior approval of RBI in writing grant or renew any loans and advances, make any investment, incur any liability including borrowing of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified," it further said.

The bank had 8,614 members at the end of March 31, 2018, pitching up a share capital worth Rs 52 crore. The bank’s advances stood at Rs 1,150.94 crore, while the reported gross NPA ratio stood at a mere 0.45%, as reported. The company, however, hasn’t filed any financial for this year. Founded in 1999, the bank has eight branches in the city.

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