The Reserve Bank of India (RBI) has restricted the Bengaluru-based private bank from doing business due to the alleged irregularities in transactions, an official said on Saturday.
“Sri Guru Raghavendra Sahakara Bank in Bengaluru shall not, without prior approval of the RBI in writing, grant or renew loans and advances, make investment, borrow funds or accept fresh deposits from January 10, 2020,” the RBI said in a directive, which has been accessed by IANS.
The central bank’s Chief General Manager Yogesh Dayal issued the order under Sections 35A and 56 of the Banking Regulation Act, 1949, from Mumbai.
Although, RBI has allowed the customers of the bank to withdraw cash up to ₹35,000 only till further notice from their savings and current accounts.
“The private bank will also not disburse payment whether in discharge of its liabilities and obligations or otherwise, enter into compromise or arrangement and sell, transfer or otherwise dispose its properties or assets except, as instructed on January 2, 2020,” said the directive.
“The bank will, however, continue to undertake business with restrictions till its financial position improves,” said an official, citing the directive.
RBI also clarified that the order has canceled the license of the bank.
“The directive shall remain in force for six months from January 10 and is subject to review,” added the official.