Bank Customers Alert: In view of the deteriorating financial situation, the Reserve Bank of India (RBI) has imposed several restrictions on Ahmedabad-based Color Merchants Co-operative Bank. There is also a ban in this that no customer can now withdraw more than Rs 50,000 in cash.
The restrictions, imposed in the form of ‘directives’, come into effect from the close of business on September 25, 2023, the central bank said in a statement. The restrictions will remain in effect for six months.
As per the instructions, the bank cannot make any grants or advance loans, make any investments, incur any liabilities and accept new deposits without the prior approval of the RBI.
RBI said, ‘Specifically, withdrawal of an amount not exceeding Rs 50,000 out of the total balance in all savings bank or current accounts or any other account of the depositor may not be permitted…’
Do not assume that the license has been revoked!
It has also been said that eligible depositors will be entitled to receive deposit insurance claim amount of up to Rs 5 lakh of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that depositors can contact their bank officials for more information. It was also said that the issue of instructions should not be construed as cancellation of banking license by RBI.
RBI said that the bank can continue to conduct banking business with restrictions until its financial condition improves. The Reserve Bank also said that it will consider amending the instructions depending on the circumstances.