RBI imposes restrictions on New India Co-op Bank

By

, ET BureauLast Updated: Feb 13, 2025, 10:21:00 PM IST

Synopsis

The Reserve Bank of India has placed restrictions on New India Co-operative Bank of Mumbai, citing liquidity concerns. With deposits amounting to Rs 2436 crores at the end of March 2024, the bank is now prohibited from granting loans, renewing advances, or accepting new deposits starting February 13, 2025, to safeguard depositors' interests.

The Reserve Bank of India (RBI) has imposed restrictions on New India Co-operative Bank, based in Mumbai, prohibiting it from issuing new loans or allowing withdrawals of deposits due to ongoing supervisory concerns.

Eligible depositors are entitled to deposit insurance claims up to Rs 5 lakh, as per the deposit insurance scheme. Depositors have been asked to submit their claims with the bank. At the end of March 2024, the co-operative bank had deposits of Rs 2436 crores.

The RBI announced that effective from the close of business on February 13, 2025, New India Co-operative Bank is barred from granting or renewing any loans or advances. It also cannot make any new investments or accept fresh deposits. It is also not allowed to disburse any payments. The bank is not allowed to dispose of any of its properties.

This action follows concerns about the bank's liquidity position, prompting the RBI to restrict the withdrawal of funds from savings, current, or any other depositor accounts. The regulator emphasised that these measures are in place to protect depositors' interests.

The RBI will continue to monitor the bank's situation and will modify these directions to ensure the protection of depositors' interests. These restrictions will remain in effect for a period of six months starting from February 13, 2025.

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