RBI Caps Sarvodaya Bank Withdrawals At Rs 15,000

The Reserve Bank of India (RBI) has imposed several restrictions on Mumbai-based Sarvodaya Co-operative Bank, effective 16 April, limiting customer withdrawals to a maximum of Rs 15,000 per account. This decision follows the bank's deteriorating financial health, as disclosed by the RBI in a press release.

The imposed withdrawal limit of Rs 15,000 will immediately affect customers, especially those requiring larger sums for daily expenses or unforeseen costs.

Depositors concerned about their funds can rest assured as the RBI has confirmed eligibility for claiming insurance on deposits up to Rs 5 lakh, provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Under Section 35A of the Banking Regulation Act, 1949, the Sarvodaya Co-operative Bank faces strict limitations on banking activities, including loan issuance, investment and payment of liabilities without prior RBI approval.

While the bank's license remains intact, it will operate under these constraints until financial conditions improve. The restrictions, slated for six months, will undergo periodic review.

Last week, RBI imposed similar restrictions on Maharashtra-based Shirpur Merchants' Co-operative Bank due to its financial decline.

Under the DICGC Act, depositors are insured up to Rs 5 lakh, covering principal and interest across all account types. Claiming insurance involves submitting willingness to the DICGC, with refunds typically processed within 90 days. Insured depositors receive priority in the liquidation process.