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Bengaluru bank issue: Ready to return depositors' money if RBI permits, says Chairman

Date: 15-01-2020
Subject: Bengaluru bank issue: Ready to return depositors' money if RBI permits, says Chairman
The Chairman of Sri Guru Raghavendra Sahakara Bank K Ramakrishna said that the bank is ready to return the money of its depositors but it is unable to do so because of the Reserve Bank of India (RBI) order that has capped withdrawals from the bank.

According to a Mint report, Ramakrishna spoke to depositors with folded hands.

"The RBI restricted the bank to allow only Rs 35,000 withdrawal. We are following the RBI rules. If tomorrow itself the RBI revokes restrictions, we are ready to return full deposits to customers," he said.

The RBI has placed restrictions on Sri Guru Raghavendra Sahakara Bank, which includes a withdrawal limit of Rs 35,000 for customers.

The Bengaluru-based private lender cannot issue new loans or make any new investments without prior approval from the banking regulator for the next six months.

The curbs do not mean that the bank's licence will be revoked, RBI clarified. The banking regulator has placed restrictions starting from the close of business on January 10.

"A sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn," the RBI said in a press release. "The bank will continue to undertake banking business with restrictions till its financial position improves," it added.

Ramakrishna said that 62 dud loans had forced the lock-up of Rs 300 crore. He will meet customers on January 19.

The bank's head office is in Basavanagudi, and branches at Kanakapura Road, Poorna Prajna Layout, Kengeri, Raja Rajeshwari Nagar, Vidyaranyapura, BTM Layout and Rajainagar in Bengaluru.

Source: moneycontrol.com

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