Central Bank on Friday imposed a withdrawal cap of Rs 1,000 for all savings and current bank accounts of Karnataka based Deccan Urban Co-op Bank, considering its current liquidity position.

These Directions shall remain in force for a period of six months from the close of business on February 19, 2021, and are subject to review, a notice by RBI said.

Customers are allowed to set off loans against deposits during the 6-month period restriction period.

RBI has asked Deccan Urban Co-operative Bank to desist from disbursing any payment in discharge of its liabilities, sell assets, accept deposits. Its customers can avail of fresh loans and deposits only with prior approval from RBI. However, they can set off loans against deposits during the restriction period.

However, the issue of the above directions "should not per se be construed as a cancellation of the banking license by RBI," the notice said. The central bank may consider modifying these directions depending on the circumstances.

First Published:Feb 20, 2021 10:34 AM IST