RBI restricts withdrawals from Jalna-based Mantha Urban Coop Bank for 6 months

RBI said it has issued certain directions to Mantha Urban Cooperative Bank

Reserve Bank of India on Tuesday imposed restrictions on withdrawals from Maharashtra-based Mantha Urban Cooperative Bank for six months.

The RBI, in a release, said it has issued certain directions to Mantha Urban Cooperative Bank, Mantha District Jalna, Maharashtra, from the close of business on November 17, 2020.

As per the directions, the bank will not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment, among others.

"In particular, no deposit of the total balance across all savings bank or current account or any other account of a depositor may be allowed to be withdrawn" subject to conditions stated in the directions, the central bank said.

The directions will remain in force for a period of six months from the close of business of November 17, 2020 and are subject to review, it added.

It further said the issue of the directions by the RBI should not per se be construed as cancellation of banking license by RBI.

The bank will continue to undertake banking business with restrictions till its financial position improves, the central bank said, and added it may consider modifications of the directions depending upon circumstances.

In a separate release, RBI said it has imposed monetary penalty of Rs 20 lakh on Bengaluru-based Shushruati Souharda Sahakara Bank Niyamita for deficiencies in regulatory compliance.

The central bank also imposed a penalty of Rs 1 lakh on The Deccan Urban Co-operative Bank, Vijayapura, Karnataka, for contravention of the directions issued by it on prohibition of loans and advances to directors.