The head of all the banks in India, Reserve Bank of India (RBI) had given extensions on the restrictions which was given to a bank by three months and has given them clear instructions on not to write or renew any loans without approval from RBI. This decision of RBI is likely to affect the customers of this bank as there is a limit on the withdrawal too. Thus, this bank would not be able to make any kind of investment, hereafter.
RBI has extended its restrictions on Millath Co-operative Bank which is Karnataka-based by three months, that is until August 8, 2021.
As per the instructions given by the RBI, the co-operative bank should not, without the approval of RBI in writing, sanction or renew any new loans and advances, make a new investment or renew an existing one, acceptance of fresh deposits, incur any liability including borrowal of funds, disburse or agree to disburse any payment whether in the discharge of its liabilities and obligations or otherwise.
Additionaly, they have also imposed a restriction on the withdrawal limit of up to Rs. 1,000 for the customers who have savings or current account or any other kind of deposit account.
These rules were initially imposed in May 2019 and have continued to be extended. It was last extended till the 7th of May, 2021.