United Western Bank Ltd. Placed under Moratorium

Case Brief

The Central Government, on an application by the Reserve Bank of India, placed United Western Bank Ltd. under moratorium effective from 2 September 2006 at 14:00 hrs. up to and inclusive of 1 December 2006, or earlier if alternate arrangements were made. The order was issued in public interest, in the interest of depositors and the banking system. During the moratorium, the bank could make only specified payments, and depositors were allowed to withdraw up to Rs. 10,000 in total from their savings, current, or other deposit accounts through branches. ATM withdrawals through the bank's own ATMs and shared ATMs were temporarily disallowed to enforce the ceiling. RBI cited the bank's negative CRAR, losses, and inability to produce a credible capital-raising plan as factors that jeopardised depositor interests, and said it would examine options including amalgamation.