RBI caps Withdrawal Limit from Deccan Urban Co-operative Bank

February 23, 2021
Current Context: The Reserve Bank of India (RBI) has put a withdrawal cap of Rs 1000 from Deccan Urban Co-operative Bank.
RBI caps Withdrawal Limit from Deccan Urban Co-operative Bank
  • The RBI has barred Deccan Urban Co-operative Bank from granting new loans and accepting deposits because of its poor liquidity position.
  • These impositions will remain for six months, as per RBI.
  • These directions are imposed by RBI as per powers under section (1) of section 35A of Banking Regulation Act 1949 read with section 56 of Banking Regulation Act 1949.
  • As per a statement from RBI, ‘Considering the bank's present liquidity position, a sum not exceeding Rs 1,000 only of the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn.
  • However, the account holders can set off their loans against deposits subject to conditions.
  • As per RBI, 99.58% of customers of Deccan Urban Co-operative Bank are fully covered by the DICGC’s Insurance Scheme. It will offer up to Rs 5 lakhs on bank deposits.
  • Static Part: 
    • HQ of Deccan Urban Co-operative Bank: Vijayapura, Karnataka

Question: 

Q.1 RBI has imposed a withdrawal cap of Rs ____ on Deccan Urban Co-operative Bank for the next 6 months?
a. Rs 3000
b. Rs 1000
c. Rs 5000
d. Rs 2000

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