rbi: The Reserve Bank of India has imposed many strict restrictions on The Baghat Urban Co-operative Bank located in Solan, Himachal Pradesh. Now bank customers will be able to withdraw cash from their accounts only up to a maximum of Rs 10,000. RBI said that in recent months many concerns had come to light regarding the functioning of the bank. The central bank discussed with the bank’s board and senior officials, but concrete steps for reform were not taken. Keeping in mind the protection of the interests of the depositors, RBI had to take this action.
Under the new conditions, the bank will no longer be able to give any new loan or advance, nor will it be able to take any new deposit or borrowing without the permission of RBI. However, the bank has been given the flexibility to adjust the customers’ deposits with their loan.
RBI said that the current cash position of the bank is weak, hence at present this limit has been fixed on the withdrawal of customers’ money. RBI also clarified that this step is not like canceling the license of the bank. The bank will be able to continue limited operations until its financial condition improves.
Additionally, eligible depositors will be entitled to receive an insurance amount up to a maximum of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that it will continuously monitor the situation of the bank and may make changes in the instructions if necessary. These restrictions will remain in force for six months from October 8, 2025 and will be reviewed as per the situation.