RBI Clamps Down on Baghat Urban Co-operative Bank with Withdrawal Restrictions

The Reserve Bank of India has implemented stringent measures against The Baghat Urban Co-operative Bank in Solan, restricting withdrawals to Rs 10,000 per customer. The central bank's intervention follows insufficient efforts by the institution to rectify supervisory concerns and safeguard depositor interests.

Without prior written permission from the RBI, the troubled bank is prohibited from granting new loans or renewing existing ones, as well as incurring further liabilities such as borrowing funds or accepting new deposits. This decision reflects the bank's current liquidity challenges.

The RBI assures customers that, despite these constraints, the Baghat Urban Co-operative Bank will still operate and manage their existing banking needs under supervision. Depositors are further protected by insurance claims up to Rs 5 lakh. The situation remains closely monitored with potential for directive modifications based on evolving circumstances.

(With inputs from agencies.)