Worried over RBI order on Raghavendra Co-op bank, depositors queue up outside its branches

After the Reserve Bank of India (RBI) has restricted the Sri Guru Raghavendra Co-operative Bank from doing business with immediate effect and capped withdrawal limit at Rs 35,000, the depositors on Tuesday queued up outside branches of the bank in Bengaluru.

The RBI has said that the licence of the bank has not been cancelled, it can continue to "undertake banking business with restrictions till its financial position improves".

"My husband has a fixed deposit of around Rs 15-20 lakh. We are retired and dependent on our savings. All of a sudden when we got the message about restrictions, we were disturbed. The advisor in the bank told us that our money is us. He told us we need to wait for six months. We are not happy with RBI directions," Tara, a depositor told ANI.

BJP MP Tejasvi Surya has earlier reassured account holders and said Finance Minister Nirmala Sitharaman was personally monitoring the issue.

"I want to assure all depositors of Sri Guru Raghavendra Co-operative Bank to not panic. Hon'ble Finance Minister Smt. @nsitharaman is appraised of matter & is personally monitoring the issue. She has assured Govt will protect interests of depositors. Grateful for her concern," Mr Surya tweeted.

RBI had, on January 10, imposed certain restrictions on Sri Gururaghavendra Sahakara Bank Niyamitha.

"In particular, 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35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions stated in the above RBI directions," the notification said.

The regulatory body said that the bank will continue to undertake banking business with restrictions until its financial position improves.

"These directions shall remain in force for a period of six months from the close of business of January 10 and are subject to review," it said.

The bank has been restricted from granting or renewing any loans and advances, make any investment, incur any liability including borrower 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.