RBI had issued limits on withdrawals from Maharashtra-based Mantha Urban Cooperative Bank for the next six months. They had declared some guidelines to Mantha Urban Cooperative Bank, Mantha District Jalna, Maharashtra, from the end of 17 November 2020.
According to the RBI, Mantha Urban Co-operative Bank will not be permitted to lend to any person without the permission of the RBI. In addition, it will be interdicted to renew old loans or deposit in a bank. Earlier, the Reserve Bank had imposed sanctions on the Punjab and Maharashtra Co-operative Bank (PMC) after the alleged scam came to light. To evaluate the bank crisis, the Reserve Bank of India (RBI) had declared a stoppage on termination on September 24, 2019.
As per the RBI directions, without any sanction of RBI in writing, the banks cannot grant or renew any loans and advances, make any deposits, obtain any expenses including accepting of funds and receiving of fresh deposits, disagree or agree to disburse any payment, with others.
In general, subject to the directions stated by the RBI, any more deposits of the total balance across all current accounts or saving accounts or any other account of a depositor is permitted to be withdrawn. The guidance of RBI will remain for a period of six months from the date 17 November 2020. The declaration of the guidelines by the central bank should not interpret the cancellation of a banking license by RBI.
The bank will forward to undertake banking business with limitations till its financial position goes smooth, and it may value changes of the guidelines depending upon situations. RBI said that it issued a monetary penalty of Rs 20 lakh on Bengaluru-based Shushruati Souhrada Sahakara Bank Niyamita for deficiencies in RBI compliance.
The regulatory bank also issued a penalty of Rs 1 lakh on The Deccan Urban Co-operative Bank, Vijayapura, Karnataka, for contravention of the guidelines imposed by it on inhibition of loans and advances to directors. On Friday, RBI has charged a penalty of Rs. 1 crores to Punjab National Bank for Payment and Settlement System Act.
Reserve Bank of India runs and controls all activities and functions of all commercial banks and other monetary institutions of the country. It plays a crucial role in the development of financial institutions in India.