Sat Feb 15 16:47:35 UTC 2025: **RBI Supersedes Board of New India Co-operative Bank, Imposes Deposit Restrictions**
MUMBAI, INDIA – The Reserve Bank of India (RBI) has superseded the board of directors of the Maharashtra-based New India Co-operative Bank for a period of 12 months. This action, announced on February 14th, follows the imposition of strict restrictions on the bank’s operations the previous day due to concerns about governance and irregularities in its lending practices.
The RBI has placed a six-month moratorium on withdrawals for depositors, citing “supervisory concerns emanating from recent material developments.” While the bank remains operational, it is barred from granting or renewing loans, accepting new deposits, or disposing of assets without prior RBI approval. Exceptions are made for essential expenses like employee salaries and utility bills.
Depositors are entitled to receive insurance claim amounts up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The RBI emphasized that this action does not constitute a cancellation of the bank’s license.
The move has caused significant anxiety among customers, with reports of long queues and concerns about accessing funds in emergencies. One depositor, Bhupendra, expressed frustration over the six-month waiting period for withdrawals, highlighting the hardship this poses.
The RBI will continue to monitor the bank’s financial position and review the restrictions after six months, potentially adjusting them based on the bank’s progress and the interests of depositors. The bank’s activities will be reviewed before the restrictions are lifted.
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