Sat Feb 15 13:02:42 UTC 2025: ## RBI Imposes Six-Month Transaction Ban on New India Co-operative Bank Amidst Lending Irregularities
**Mumbai, February 14, 2025** – The Reserve Bank of India (RBI) has imposed a six-month transaction ban on the Mumbai-based New India Co-operative Bank Ltd., citing irregularities in its lending practices. The order, effective February 13th, sparked immediate panic among depositors who flocked to the bank’s Mira Road East branch, prompting a heavy police presence to manage the crowds.
The RBI’s directive prohibits the bank from granting new loans, accepting new deposits, making investments, or disposing of assets without prior written approval. While account holders are barred from withdrawing funds from savings, current, or other accounts (except for loan set-offs under specific conditions), the RBI has allowed for the payment of essential expenses like salaries, rent, and utilities.
Customers expressed anger and frustration over the sudden restrictions, highlighting the impact on their financial obligations. One depositor, Bhupendra, reported a two-hour wait and uncertainty about accessing funds in emergencies. Another, Seema Waghmare, criticized the lack of prior warning, particularly for recent depositors.
The RBI clarified that the action is a precautionary measure to safeguard depositors’ interests and is not a cancellation of the bank’s license. Depositors are eligible for deposit insurance coverage up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The RBI will continue monitoring the bank’s financial position and will review the restrictions after six months, potentially modifying them based on the bank’s progress. The bank will continue limited operations under the specified restrictions until its financial health improves.
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