The Reserve Bank of India ion Saturday placed United Western Bank under moratorium till December 1, following its inability to come up with any credible plan to raise fresh capital to shore up capital base to deal with mounting losses.
"During this (moratorium) period, RBI will consider various options, including amalgamation of United Western Bank with any other bank and finalise the plans in public interest with a view to ensure that the public deposits are protected," the central bank said in a statement.
However, it added that the dateline of moratorium could be hastened, if alternate arrangements are put in place.
"The bank's net non-performing assets were 5.66 per cent as on March 31, 2006, as compared to the peer group figure of 1.97 per cent," it said.
The bank's assessed Capital to Risk Weighted Asset Ratio (CRAR) turned negative at -0.3 per cent as on June 30, 2005.
During the moratorium period, bank's depositors would be permitted to withdraw up to Rs 10,000 from savings bank account or current account or any other deposit account through any of the branches of the bank, RBI said.
For the present, customers of the bank will not be able to withdraw money through the ATMs of the bank or through its shared networks, it added.
Headquartered at Satara in Maharashtra, United Western Bank has a network of 230 branches, 12 extension counters and 75 ATMs.
Listed on Bombay Stock Exchange, the bank's deposits were at Rs 6,480.19 crore (Rs 64.801 billion) and advances were Rs 4,006.27 crore (Rs 40.062 billion). The bank incurred a loss of Rs 98.64 crore (Rs 986.4 million) and Rs 106.48 crore (Rs 1.064 billion) during 2004-05 and 2005-06, respectively.