RBI curbs on Mapusa Urban Bank withdrawalsTNN | Jul 26, 2015 MAPUSA: In a major setback to Mapusa Urban Co-operative Bank, RBI has directed it not to allow customers to withdraw over 1,000 from savings, current or other deposit accounts. This will be in effect till December.
The direction is part of 15 sanctions issued as the bank's CRR (cash reserve ratio) is in the negative, a violation of banking laws. Acknowledging the latter, ex-Union law minister, and bank founder, Ramakant Khalap, said RBI will be asked to review its "uncalled for" decision. He added, "We ask our customers not to panic and assure them that their every single rupee is safe." Sources told STOI that the bank's board members met late Saturday evening under vice-chairman Gurudas Natekar and passed a resolution to request RBI to reconsider its directions. The bank's financial condition is good, the FD and share capital have increased, sources said. Ramakant and his son—present bank chairman Ashwin—were not present for the meeting, sources said. These sanctions mean the bank's new chairman, Khalap's son Ashwin's plans to set up ATMs and expand into other states will likely be on hold. Apart from the withdrawals' restriction, RBI has directed the bank not to grant/renew any loans and advances, make any investments, incur any liability, including fresh deposits, disburse/agree to disburse any payment whether in discharge of liabilities/obligations or otherwise, enter into any compromise/agreement and sell, transfer or dispose of any properties or assets without prior approval. It has permitted the bank to meet expenses of employees' salaries, gratuity/PF benefits, taxes, bills, certain premiums, invest in government-approved securities and towards capital from existing bank, under monthly advice to RBI.
