South Gujarat bank is one of the four struggling local area banks. The only function left with the bank now will be paying back the depositors and once this is completed, the bank will be closed down. The process is expected to take six months.
The bank has a depositor base of over 7,000 in and around Surat district. S P Negi, deputy general manager of the Reserve Bank of India (RBI) in Ahmedabad, on Thursday said on the basis of earlier recommendations of the RBI, the Union government has passed an order for moratorium of the bank which will come in force on Thursday till February next year. During this period, the bank is only permitted to make payments to its depositors.
