Big update for account holders: RBI limits withdrawals to ₹10,000 from this bank

Shimla (The Uttam Hindu) – The Reserve Bank of India has imposed several strict restrictions on The Baghat Urban Co-operative Bank, located in Solan, Himachal Pradesh

. Following this, bank customers will be able to withdraw a maximum of ₹10,000 from their accounts.

Regarding this matter, the RBI stated that several concerns had been raised about the bank's operations in recent months. The central bank discussed the matter with the bank's board and senior officials, but no concrete steps were taken to improve it. The RBI had to take this action to protect the interests of depositors. Under the new conditions, the bank will no longer be able to grant new loans or advances, nor accept new deposits or borrow money, without RBI approval. However, the bank has been given the flexibility to adjust customer deposits against their loans.

The RBI stated that the bank's current cash position is weak, and therefore, this limit on customer withdrawals has been imposed. The RBI also clarified that this step does not amount to revoking the bank's license. The bank will be able to continue limited operations until its financial situation improves. Furthermore, eligible depositors will be entitled to receive a maximum insurance amount of ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation. The RBI stated that it will continuously monitor the bank's situation and may amend its instructions if necessary. These restrictions will be in effect for six months, effective October 8, 2025, and will be reviewed as the situation evolves.