Kolhapur, Jan 7 : The Reserve Bank of India (RBI) has imposed economic sanction on Youth Development Cooperative Bank for rising NPA beyond the limitation from Monday.
It has freezed all accounts of the banks and its branches and allowed account holders to withdraw only Rs 5,000 for once in six months period. Receiving a notice to this effect from the RBI, R P Patil, bank chairman and Arun Narke, senior director and former president of the bank said the bank administration received the notice on Monday.
However, both claimed that there was nothing to worry about the financial position of the bank, which was a very strong. Mr Narke said that RBI took this action only for six month period and if the outstanding areas of defaulters, would extract within a month's period, then the RBI could relax the economic sanction . He also termed the RBI'S action ''routine one'' and only for increased NPA.
He said that all administration staff and director board of the bank try their best to extract outstanding arrears from defaulters. Founded in 1975, Youth Bank functions in four districts-- Kolhapur, Sangli, Ratnagiri and Sindhudurg districts with 12 branches.
At present, the bank has a deposit of 120 crore, while Rs 38 crore has been given as loan of which only Rs 18 crore has been recovered, Mr Narke added. (UNI)