On February 18, 2021 The Reserve Bank of India(RBI) on considering the present liquidity position of Deccan Urban Co-operative Bank Ltd., has imposed a withdrawal cap of Rs 1,000 on the customers of the bank. But, customers are allowed to set off loans against deposits subject to conditions. This is for the period of 6 months from the close of business on February 19, 2021.
- This is part of certain directions given by RBI to the bank
Note: This direction has been imposed by RBI in exercise of powers vested in it under sub section (1) of Section 35 A of the Banking Regulation Act, 1949 read with Section 56 of the Banking Regulation Act, 1949.
Other Directions for the Bank:
CEO of the bank only with prior approval from RBI in writing shall do the following:
i.Granting or renewing any loans and advance
ii.Make any investment, incur any liability including borrowing of funds and accepting of fresh deposits
iii.Disburse any payment whether in discharge of its liabilities or otherwise, or dispose of any of its assets except as notified in the RBI direction.
99.58% of Depositors are fully covered by the DICGC Insurance Scheme
RBI also mentioned that 99.58% of the depositors are fully covered by the insurance scheme of Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI. It provides insurance cover up to Rs 5 lakh on bank deposits.
What is DIGCC?
Purpose– To provide insurance of deposits and guarantee of credit facilities.
Functions are Governed by– The provisions of ‘The Deposit Insurance and Credit Guarantee Corporation Act, 1961’ (DICGC Act) and ‘The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961’
Recent Related News:
The Internal Working Group (IWG) of Reserve Bank of India (RBI) which was formulated on June 12, 2020 to review extant ownership guidelines and corporate structure for Indian private sector banks has submitted its report on November 20, 2020. It has recommended an increase in the promoters’ stake in Private Banks to 26% from 15% of the paid-up voting equity share capital of the bank in 15 years.
About Deccan Urban Co-operative Bank Ltd.,
Headquarters– Vijayapura, Karnataka
