RBI takes action against Babaji Date Mahila Sahakari Bank, account holders cannot withdraw more than Rs 5,000

The Reserve Bank of India (RBI) on Monday launched a major crackdown on a co-operative bank in Maharashtra. The RBI has imposed business restrictions on Babaji Date Mahila Sahakari Bank in Yavatmal in the state. In addition, account holders of this bank are also prohibited from withdrawing more than Rs 5,000. For the past few days, the RBI has been pursuing a tough policy against co-operative banks. Under this, action has been taken against Babaji Date Mahila Sahakari Bank.

The RBI has said that once these restrictions are in place, the bank will not be able to issue any new loans after the end of its term on November 8, 2021. Also, this bank cannot accept any deposit without the permission of RBI. In addition, depositors of this bank will not be able to withdraw more than Rs.5000 from their account.

The RBI said in a statement: "Considering the bank's present liquidity position, a sum not exceeding ₹5000/- (Rupees Five Thousand only) from the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn, but are allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions. The issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances. These Directions shall remain in force for a period of six months from the close of business on November 8, 2021 and are subject to review."