The RBI said it issued the directions to chief executive officer of the bank on Thursday (February 18).
It has also asked the lender to desist from disbursing any payment whether in discharge of its liabilities or otherwise, or dispose of any of its assets except as notified in the RBI direction.
“Considering the bank’s present liquidity position, a sum not exceeding Rs 1000 only of the total balance across all savings bank or current accounts or any other account of a depositor, may be allowed to be withdrawn,” RBI said in a release on Friday.
It said customers can set off their loans against deposits subject to conditions.
“However, 99.58 per cent of the depositors are fully covered by the DICGC insurance scheme,” said the regulator.
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, provides insurance cover on bank deposits.
The RBI further said putting the bank under restrictions should not be construed as cancellation of its banking license.
The bank will continue to undertake banking business with restrictions till its financial position improves.
The Reserve Bank may consider modifications of the directions depending upon circumstances.
The directions are set to remain in force for six months from the close of business on February 19, 2021 and are subject to review, it added.