The Reserve Bank of India (RBI) has restricted cash withdrawals of upto Rs. 35,000 for the account holders of Sri Gururaghavendra Sahakara Bank Niyamitha (SGRSBN) in Bengaluru, Karnataka after Punjab & Maharashtra Cooperative (PMC) bank.
As per the RBI directions, the SGRSBN will be unable to grant or renew loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of fresh deposits from the close of business on January 10, 2020.
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It may be mentioned here that RBI had earlier limited cash withdrawals for the account holders of the PMC Bank, following fraudulent cases. The bank has also been stopped from disbursing any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets.
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The bank, however, will continue to undertake banking business with restrictions till its financial position improves. As per RBI, the directions shall remain in force for a period of six months from the close of business of January 10, 2020 and are subject to review.
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