Big news for the customers of City Cooperative Bank, RBI extended the restrictions till April 16

RBI had directed restrictions on this cooperative bank till 16 January 2022. Due to the deteriorating financial condition of the bank, the central bank had imposed restrictions on City Cooperative Bank.

Due to the deteriorating financial condition of the bank, the central bank had imposed restrictions on City Cooperative Bank.

Reserve Bank of India has increased the restrictions on City Cooperative Bank- Mumbai. RBI (RBI, based in Mumbai City Cooperative Bank But the restrictions have been extended till 16 April 2022. Earlier, RBI had directed restrictions on this cooperative bank till 16 January 2022. Due to the deteriorating financial condition of the bank, the central bank had imposed restrictions on City Cooperative Bank. Even before this, the Reserve Bank has taken action against many co-operative banks. City Cooperative Bank has 10 branches in Mumbai Metropolitan Region. As on March 31, 2021, the bank’s total deposits stood at Rs 411.16 crore, advances Rs 204.90 crore and gross non-performing assets (NPA) Rs 194.59 crore.

Due to the extension of the date of instructions on the restrictions on City Cooperative Bank, the problems of the customers have increased. They will not be able to withdraw more money than the RBI fixed limit. However, his deposits up to Rs 5 lakh are safe. Under the Deposit Insurance and Credit Guarantee Corporation (DICGC), customers will get their money back.

What is Deposit Insurance?

In case of default or failure of a bank, to an extent, the deposits of the customers remain safe. This is called deposit insurance. Deposit insurance is a type of protection cover. This is available to the depositors of the bank. DICGC provides this insurance. It is a wholly owned company of Reserve Bank of India (RBI).

As per the current provisions, deposits up to Rs 5 lakh are safe in case the bank’s license is canceled and the liquidation process starts. Under this law, depositors of 23 co-operative banks have also come, which are under financial pressure and on which some restrictions have been imposed by the Reserve Bank. DICGC is a subsidiary of RBI. This bank provides insurance for deposits.

Last year, CCB issued Expression of Interest (EoI) to identify equity investor/group of investors who are willing to take management control to revive the bank and start regular day-to-day operations. RBI had rejected the proposal of Cooperative Bank to merge with Maharashtra State Cooperative (MSC) Bank.

Let us inform you that in accordance with sub-section (2) under Section 1 of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021, the Central Government has implemented the provision of this Act on the 1st day of September, 2021. With this, all the depositors will get Rs 5 lakh, whose banks have been put on the moratorium by the Reserve Bank. An amount of Rs 5 lakh will also be available to the depositors of those banks which were running on the moratorium even before the passing of the Bank Deposit Guarantee Act.

Also read- Budget 2022: Will the lock-in period for tax benefits on FDs be reduced to 3 years? Know the demand of banks

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