RBI imposes restrictions on operations of Puducherry Co-operative Urban Bank
The Reserve Bank of India has imposed operational restrictions on the Puducherry Co-operative Urban Bank to protect depositors. The bank is currently prohibited from issuing new loans or accepting fresh deposits without prior approval due to concerns over its financial health.
Why it matters
Regulatory intervention in local cooperative banks is essential to prevent systemic failures and protect the savings of individual depositors.
RBI imposes restrictions on operations of Puducherry Co-operative Urban Bank PUDUCHERRY The Reserve Bank of India has imposed restrictions on the banking operations of Puducherry Co-operative Urban Bank Limited allowing depositors to withdraw only up to ₹5,000 from their savings, current, recuring deposit, term deposit and other accounts. The RBI in its directive said the restrictions were necessary to protect the interests of depositors and for securing proper management of the bank. The bank has been prevented from granting or renewing any loans or advances, making any investments, incurring any liability, including borrowal of funds and acceptance of fresh deposits without prior approval of the RBI, said a government source.
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