RBI: The Reserve Bank of India has imposed several strict restrictions on The Baghat Urban Co-operative Bank, located in Solan, Himachal Pradesh. Bank customers will now be limited to withdrawing a maximum of ₹10,000 from their accounts.
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RBI: The Reserve Bank of India has imposed several strict restrictions on The Baghat Urban Co-operative Bank, located in Solan, Himachal Pradesh. Customers will now be limited to withdrawing a maximum of ₹10,000 from their accounts. The RBI stated that several concerns had been raised regarding the bank’s operations in recent months. The central bank discussed the bank’s operations with its board and senior officials, but no concrete steps were taken to improve the situation. The RBI took this action to protect the interests of depositors.
Under the new conditions, the bank will no longer be able to grant new loans or advances, nor accept new deposits or borrowings, without RBI approval. However, the bank has been given the flexibility to adjust customer deposits against their loans.
The RBI stated that the bank’s current cash position is weak, so this limit on customer withdrawals has been imposed. The RBI also clarified that this action does not amount to revoking the bank’s license. The bank will be able to continue its limited operations until its financial situation improves.
In addition, eligible depositors will be entitled to receive a maximum insurance amount of ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The RBI stated that it will continue to monitor the bank’s situation and may amend its instructions if necessary. These restrictions will be in effect for a period of six months, effective October 8, 2025, and will be reviewed as the situation evolves.
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