Customers panic as RBI imposes curbs on Guru Raghavendra co-op bank

Updated: Tuesday, January 14, 2020, 14:57 [IST]

Bengaluru, Jan 14: Days after the Reserve Bank of India (RBI) capped to Rs 35,000 the withdrawal limit of Sri Guru Raghavendra Co-operative Bank, BJP MP Tejasvi Surya reassured account holders and said Finance Minister Nirmala Sitharaman was personally monitoring the issue.

Taking to Twitter, Surya attached the letter in which he had apprised the Finance Minister of the situation.

Depositors stand in queue to withdraw money from Sri Guru Raghavendra Sahakara Bank in Bengaluru, Tuesday, Jan.14, 2020. The Reserve Bank of India (RBI) has curbed Sri Guru Raghavendra Sahakara bank from doing business with immediate effect for alleged irregularities in transactions.

Worried customers rushed to the bank's branches to withdraw their funds. However, customers were able to withdraw only Rs 35,000 irrespective of their deposits.

The RBI curbs on the bank unnerved depositors as the co-operative banking sector is yet to recover from the collapse of Punjab and Maharashtra Co-operative Bank in Mumbai recently.

RBI had on 10 th January imposed certain restrictions on Sri Gururaghavendra Sahakara Bank Niyamitha.

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"...As from the close of business on January 10, 2020, the aforesaid bank shall not... grant or renew any loans and advances, make any investment... In particular, a sum not exceeding ₹35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions..." the RBI said in a statement uploaded on its website.