Depositors can withdraw up to ₹10 lakh as RBI imposes six-month restrictions over financial concerns.
Key Highlights
Eligible depositors remain protected by DICGC insurance cover of up to ₹5 lakh.
RBI has imposed six-month restrictions on Mogaveera Co-operative Bank.
The restrictions became effective after business hours on Friday.
Depositors can withdraw a maximum of ₹10 lakh from their accounts.
The bank cannot sanction new loans or renew existing credit facilities.
Fresh deposits, investments, borrowing, and new liabilities have been prohibited.
RBI said the action was taken due to the bank’s weak financial position and lack of corrective efforts.
Updated News Article
The Reserve Bank of India (RBI) has imposed strict restrictions on Mumbai-based Mogaveera Co-operative Bank, citing concerns over the bank’s deteriorating financial health and inadequate corrective measures by its management. The restrictions came into effect after the close of business on Friday and will remain in force for a period of six months, subject to periodic review by the central bank.
Under the RBI’s directives, depositors will be allowed to withdraw a maximum of ₹10 lakh from their savings, current, or any other accounts, depending on the available liquidity position of the bank. The move has been taken to safeguard depositors’ interests and prevent any further deterioration in the bank’s financial condition.
The restrictions significantly curtail the bank’s operations. Mogaveera Co-operative Bank will not be permitted to sanction or disburse new loans, renew existing loans, make fresh investments, accept new deposits, incur additional liabilities, or borrow funds without prior approval from the RBI.
According to the central bank, it had been engaging with the bank’s board of directors and senior management for a considerable period in an effort to address supervisory concerns. However, the bank management allegedly failed to undertake meaningful corrective action to improve its financial position.
RBI clarified that these directions should not be interpreted as the cancellation of the bank’s banking licence. Instead, they are intended as a corrective measure aimed at stabilising the institution and protecting depositors. The restrictions may be modified or withdrawn if the bank demonstrates improvements in its financial health and addresses the regulatory concerns raised by the central bank.
For depositors worried about the safety of their savings, RBI highlighted that eligible account holders remain protected under the provisions of the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961. Depositors are entitled to insurance coverage of up to ₹5 lakh on their eligible deposits.
If a depositor’s total eligible deposits are up to ₹5 lakh, the entire amount can be claimed through DICGC, subject to the prescribed verification process and submission of consent. Customers seeking further details regarding the claim process have been advised to contact bank officials directly.
The latest action underscores the RBI’s continued focus on protecting depositors and maintaining stability in the cooperative banking sector through timely regulatory intervention.
