Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.a)Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balanceb)Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balancec)Karmala Urban Co-operative Bank - Rs.10,000 of the total balanced)All of the above are correcte)None of theseCorrect answer is option 'D'. Can you explain this answer?

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Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.

a)
Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balance
b)
Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balance
c)
Karmala Urban Co-operative Bank - Rs.10,000 of the total balance
d)
All of the above are correct
e)
None of these

Correct answer is option 'D'. Can you explain this answer?

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Recently Reserve Bank of India has placed three urban cooperative ban...

The Reserve Bank of India has placed three urban co-operative banks (UCBs) -- Durga Co-operative Urban Bank, Vijayawada; Jaiprakash Narayan Nagari Sahakari Bank, Basmatnagar; and The Karmala Urban Co-operative Bank, Solapur -- under Directions.
In the case of Durga Co-operative Urban Bank, Vijayawada (Andhra Pradesh), RBI said the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review. Depositors will be allowed to withdraw a sum not exceeding Rs.1.50 lakh of the total balance
In the case of Jaiprakash Narayan Nagari Sahakari Bank, Basmatnagar (Maharashtra), RBI said the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review.
Considering the bank’s liquidity position, no amount from the total balance across all savings bank or current accounts or any other account of a depositor may be allowed to be withdrawn.
In the case of The Karmala Urban Co-operative Bank, Solapur (Maharashtra), the Directions will remain in force for six months from the close of business on July 29, 2022, and are subject to review.
Depositors will be allowed to withdraw not more than Rs.10,000 of the total balance across all savings bank or current accounts or any other account, subject to the conditions stated in the Directions.
The central bank said the issue of the above Directions should not per se be construed as a cancellation of a banking license.
The UCBs will continue to undertake banking business with restrictions till their financial position improves.

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Directions: Read the passage carefully and select the best answer to each question out of the given five alternatives.In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank NSE 4.79 % too came under stress leading to restructuring by the regulator and the government.The amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready, sources said. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet, sources added. Once the Bill becomes the law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks.As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts. DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Finance Minister Nirmala Sitharaman in the Budget speech in February said the government had approved an increase in the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakh for bank customers last year. It could not be presented in the Budget session due to curtailment of the last session following the spread of the second wave of COVID-19 pandemic.It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it was static since 1993. The cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI. With increased insurance cover, the banks are paying a higher premium of 12 paise against 10 paise per Rs 100 deposited without any additional burden on account holders. The deposit insurance scheme covers all banks operating in India, including private sector, cooperative, and even branches of foreign banks. There are some exemptions such as deposits of foreign governments, deposits of central and state governments, and inter-bank deposits.It can be recalled that way back in 2009, the Raghuram Rajan committee on financial sector reforms had recommended strengthening the capacity of the DICGC, a more explicit system of prompt, corrective action, and making deposit insurance premia more risk-based.Q. Consider the following statements and answer the question.A. the government raised insurance cover on deposit five-folds to Rs. 5 lakh.B. The amendment is brought by the suggestion of RBI.C. The amendment is made to ease the burden of the depositors.

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Directions: Read the passage carefully and select the best answer to each question out of the given five alternatives.In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank NSE 4.79 % too came under stress leading to restructuring by the regulator and the government.The amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready, sources said. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet, sources added. Once the Bill becomes the law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks.As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts. DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Finance Minister Nirmala Sitharaman in the Budget speech in February said the government had approved an increase in the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakh for bank customers last year. It could not be presented in the Budget session due to curtailment of the last session following the spread of the second wave of COVID-19 pandemic.It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it was static since 1993. The cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI. With increased insurance cover, the banks are paying a higher premium of 12 paise against 10 paise per Rs 100 deposited without any additional burden on account holders. The deposit insurance scheme covers all banks operating in India, including private sector, cooperative, and even branches of foreign banks. There are some exemptions such as deposits of foreign governments, deposits of central and state governments, and inter-bank deposits.It can be recalled that way back in 2009, the Raghuram Rajan committee on financial sector reforms had recommended strengthening the capacity of the DICGC, a more explicit system of prompt, corrective action, and making deposit insurance premia more risk-based.Q. What changes will come after the bill has passed?

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Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.a)Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balanceb)Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balancec)Karmala Urban Co-operative Bank - Rs.10,000 of the total balanced)All of the above are correcte)None of theseCorrect answer is option 'D'. Can you explain this answer?

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Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.a)Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balanceb)Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balancec)Karmala Urban Co-operative Bank - Rs.10,000 of the total balanced)All of the above are correcte)None of theseCorrect answer is option 'D'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.a)Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balanceb)Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balancec)Karmala Urban Co-operative Bank - Rs.10,000 of the total balanced)All of the above are correcte)None of theseCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Recently Reserve Bank of India has placed three urban cooperative banks (UCBs) under Directions. Consider them in respect of the amount allowed to withdraw for depositors, which is incorrect.a)Durga Co-operative Urban Bank - Rs.1.50 lakh of the total balanceb)Jaiprakash Narayan Nagari Sahakari Bank - no amount from the total balancec)Karmala Urban Co-operative Bank - Rs.10,000 of the total balanced)All of the above are correcte)None of theseCorrect answer is option 'D'. Can you explain this answer?.

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