RBI Restricts Operations of Nagar Sahakari Bank Amid Supervisory Concerns

The Reserve Bank of India has limited operations at Nagar Sahakari Bank in Etawah, capping withdrawals at Rs 10,000 per customer due to supervisory concerns. The bank cannot give new loans or accept deposits without RBI's approval. The RBI continues to monitor the bank's situation.

The Reserve Bank of India (RBI) imposed restrictions on Nagar Sahakari Bank based in Etawah from Monday, limiting withdrawals to Rs 10,000 per customer due to supervisory concerns. This move follows material developments impacting the bank's liquidity and aims to protect depositor interests.

The RBI's directive effectively restricts the bank from issuing new loans, accepting fresh deposits, or borrowing funds without prior written approval. It, however, permits essential expenditure such as employee salaries and utility bills. These measures are a response to the bank's inadequate actions to address ongoing supervisory issues.

Deposit insurance will cover eligible deposits up to Rs 5 lakh, and the bank retains its license under specified conditions. The RBI will continue close monitoring, and further action will be taken as needed to safeguard depositors' money.