RBI Restricts Operations at Gauhati Cooperative Urban Bank

The RBI has imposed restrictions on The Gauhati Cooperative Urban Bank due to its deteriorating financial position, capping customer withdrawals at Rs 35,000. Without RBI approval, the bank cannot grant loans or make investments. Eligible depositors can claim up to Rs 5 lakh insurance from DICGC.

The Reserve Bank of India (RBI) has placed significant limitations on The Gauhati Cooperative Urban Bank following a decline in its financial health. Customers are now restricted to withdrawing a maximum of Rs 35,000.

Effective from the end of the business day on Tuesday, these 'Directions' will be in place for six months, limiting the bank's operations without prior RBI approval. This includes granting loans and making investments.

The RBI had engaged with the bank's management and board, but due to insufficient efforts to resolve supervisory concerns, the restrictions were deemed necessary. Eligible depositors may claim insurance up to Rs 5 lakh, and the bank's license remains intact for now.

(With inputs from agencies.)