RBI Imposes Restrictions on New India Co-operative Bank; Customers Can't Withdraw Deposits

The Reserve Bank of India (RBI) has placed restrictions on New India Co-operative Bank citing liquidity concerns. The central body has barred the Mumbai-based cooperative bank from issuing new loans while also prohibiting withdrawals of deposits as a part of its supervisory measures.

Eligible depositors are entitled to receive deposit insurance claims up to Rs 5 lakh, as per deposit insurance scheme. The account holders have been asked to submit their claims with the bank.

RBI has announced that with effect from closure of business hours on February 13, 2025, New India Co-operative Bank is barred from issuing or granting any loans and advances. It is also not competent to make new investments or accept fresh deposits. It is also not allowed to disburse any payments. The cooperative bank is not eligible to dispose of any of its properties.

The RBI has also imposed restrictions on the withdrawal of funds from savings, current, or any other depositor accounts. The regulator has said that these measures are being taken to protect depositors' interests. These restrictions will remain in effect for six months starting from February 13, 2025.