RBI Restricts Operations of Loknete RD (Appa) Kshirsagar Sahakari Bank

The RBI has imposed several restrictions on Loknete RD (Appa) Kshirsagar Sahakari Bank due to supervisory concerns. Withdrawals are prohibited for depositors, though eligible depositors can claim up to Rs 5 lakh. These restrictions are meant to protect depositors' interests and will be in place for six months.

The Reserve Bank of India has clamped down on Loknete RD (Appa) Kshirsagar Sahakari Bank, imposing several restrictions including a freeze on depositor withdrawals, citing material supervisory concerns related to the bank's affairs in the Nashik district.

Depositors are, however, eligible for a deposit insurance claim of up to Rs 5 lakh, as assured by the Deposit Insurance and Credit Guarantee Corporation, according to an RBI statement released on Tuesday.

The restrictions, which became effective on Tuesday post-business hours, also prohibit the bank from granting loans, renewing advances, or incurring new liabilities without RBI's prior approval. The RBI stated that these steps are in place to safeguard depositors while it monitors the financial condition of the bank.

(With inputs from agencies.)