RBI imposes business restrictions on 2 co-operative banks citing material supervisory concerns

The Reserve Bank of India (RBI) imposed business restrictions on The Karwar Urban Co-operative Bank and The Amanath Co-operative Bank on June 12, citing material supervisory concerns. These restrictions will be effective for six months from June 12, 2024, subject to review. Both banks are prohibited from granting or renewing loans, making investments, and accepting fresh deposits. \r

Additionally, they are barred from disbursements, compromises, or asset disposal. Karwar Urban Co-operative Bank cannot permit withdrawals but can set off loans against deposits. A sum not exceeding Rs 60,000 can be withdrawn from Amanath Co-operative Bank. \r

Eligible depositors of both banks can claim insurance up to Rs 5 lakh within 90 days.