Vitrag Bank under RBI scanner

After placing restriction on the Metro Co-operative Bank, the Reserve Bank of India (RBI) has placed restrictions under Section 35 (A) of Banking Regulations Act on another Surat-based co-operative bank.

RBI placed restriction on Vitrag Co-operative Bank Ltd late on Thursday. The Surat Bankers Clearing House had revoked the membership of the bank on last week, as it failed to meet the clearing requirement for the day.

The bank, however, started repaying to its depositors and account holders from Monday. The bank repaid around Rs 25 lakh to its depositors.

RBI's decision means that the bank will not be able to make any more transactions. RBI has, however, permitted the bank to pay up to a maximum of Rs 500 to each accountholder and depositor.

Yash Desai, Vitrag Bank's manager in-charge told Business Standard, "We were repaying the money of our depositors, but we will not be able to do so now, due to the RBI restrictions. We will start repaying up to Rs. 500 to the depositors from Monday onwards."

"For the time being, we will try recover the money due to us. Vitrag Bank's loan advances stand at Rs 12 crore, which we intend to recover, so that we can resume routine banking operations," Desai added.