Himachal Pradesh News
RBI Extends Curbs on Baghat Urban Cooperative Bank Till July 8, Depositors Face Continued Withdrawal Limits
In a significant development, the Reserve Bank of India (RBI) has extended the financial restrictions imposed on Baghat Urban Cooperative Bank for another three months, pushing the deadline to July 8. While the move gives the struggling bank more time to stabilize its financial condition, it has left thousands of depositors disappointed as withdrawal limits continue.
In a significant development, the Reserve Bank of India (RBI) has extended the financial restrictions imposed on Baghat Urban Cooperative Bank for another three months, pushing the deadline to July 8. While the move gives the struggling bank more time to stabilize its financial condition, it has left thousands of depositors disappointed as withdrawal limits continue.
Relief for Bank, Worry for Depositors
The RBI’s decision comes after reviewing the bank’s financial performance over the past six months. Officials noted a visible improvement in recovery efforts, with non-performing assets (NPAs) reducing from 138 crore to 107 crore. Despite missing its target of bringing NPAs down to 97 crore, the progress was considered sufficient to grant the bank additional time instead of taking stricter action.
For depositors, however, the extension means prolonged restrictions on accessing their full savings. Many had hoped for a relaxation in withdrawal limits, but the curbs remain in place.
Management to Submit Revival Plan
Confirming the development, Managing Director Rajkumar Kashyap stated that the bank will submit a detailed three-month action plan to the RBI. The plan will outline strategies to further improve financial health and ensure compliance with regulatory norms.
This extension is seen as a crucial opportunity for the bank to avoid extreme measures such as closure or forced merger.
Tough Measures Under Consideration
To strengthen its financial position, the bank management is considering several corrective steps, including:
- Shutting down or merging loss-making branches in Una, Kangra, and Shimla
- Closing underperforming cash counters like Nahan
- Introducing a stricter one-time settlement (OTS) scheme
- Exploring voluntary retirement schemes (VRS) for employees
- Reducing operational expenses
Additionally, the bank has been directed to increase its share capital. This is essential to improve its Capital to Risk Weighted Assets Ratio (CRAR), which currently stands at a concerning negative 10 — far below the regulatory requirement of 9%.
Insurance Relief for Some Depositors
There is some relief for a section of customers. Around 5,600 depositors have already received insurance payouts totaling ₹89 crore through the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, a large number of customers are still waiting to access their full funds.
