The RBI has banned withdrawals from this bank: The Reserve Bank of India has taken major action against Mahashankarrao Pujari Nutan Nagari Sahakari Bank Limited, a Co-operative Bank of Maharashtra in Kolhapur. The central bank has now banned Mahashankarrao Pujari Nutan Nagari Sahakari Bank Limited from withdrawing money. After the ban, bank customers will no longer be able to withdraw their money. Mahashankarrao Pujari Nutan Nagari Sahakari Bank Limited was facing financial crisis for a long time.
Appropriate action against the bank
About 99.88 per cent of the depositors in this bank are covered by Deposit Insurance and Credit Guarantee Corporation Insurance. Under this scheme, depositors get insurance facility on a total deposit of Rs. 5 lakhs. Reporting on the matter, the RBI has said that withdrawals from banks have been banned since May 13, 2022. The ban will be for a full 6 months. In addition, the RBI will continue to monitor the bank’s operations. The RBI said the decision was taken to maintain liquidity in the bank. As a result, customers will no longer be able to withdraw money from their accounts.
The RBI has also said that the central bank’s decision should not be seen in the context of bank closures. The RBI has not revoked the license of this co-operative bank. In addition, the RBI has said that banks will now have to seek RBI permission before renewing any type of loan.
What is DICGC?
DICGC is a subsidiary of the Reserve Bank of India, which provides insurance cover to customers on deposits with the bank. It provides insurance for up to Rs. 5 lakhs. There is no risk of losing the customer’s money through this insurance coverage.