RBI restricts operations of Surat Nagrik Sahakari Bank

Depositors will not be allowed to withdraw more than Rs 1,000 of total balance

The Reserve Bank of India has placed several restrictions on Surat Nagrik Sahakari Bank Ltd with regard to garnering fresh deposits, granting new loans or renewing loans, making investments, entering into agreements to sell, transfer or dispose properties or other assets except as notified in the RBI Directions dated February 27.

Depositors of the bank will not be allowed to withdraw more than Rs 1,000 of the total balance, in any kind of account they hold with the bank, said the RBI in a press release issued today. These orders are in effect from March 1.

The RBI has, however, clarified that issue of Directions should not per se be construed as cancellation of banking licence. Rather, the bank will continue to undertake banking business, but with restrictions till its financial position improves. The RBI may consider modifications of these Directions depending upon circumstances, the release said.

This means the bank can effectively carry out its recovery activities with regard to loans and purse any legal cases in this regard.
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