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HYDERABAD: IN view of the liquidity problems being faced by Kanyaka Parameswari Bank, a Hyderabad-based urban co-operative bank, the Reserve Bank of India, on Thursday, imposed restrictions on withdrawal of deposits.

The bank's Chairperson, Ms Grandhi Madhavi, told Business Line that the bank was directed by the regulator not to allow withdrawal of more than Rs 500 per person. The bank was also advised not to accept fresh deposits. These directives came into effect on Friday.

However, she said that of around 50 depositors of the bank, majority were friends and relatives and there were very few retail public depositors. She said the situation would improve soon once the bank showed results on recoveries, estimated at around Rs 2 crore. The outstanding deposits, including savings bank deposits, amounted close to Rs 1 crore, she said.

Stating that the bank had a deposit base of over Rs 6 crore couple of years back, Ms Madhavi said the failure of co-operative banks in the State had resulted in the depositors going in for pre-matured withdrawals, bringing down the current deposit base to around Rs 1 crore.

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