Customers queue outside New India Co-operative Bank as RBI imposes limits on fund withdrawals
Customers queue outside New India Co-operative Bank as RBI imposes limits on fund withdrawals
The Reserve Bank’s directives for New India Co-operative Bank in Mumbai took effect at the end of business on Thursday
Long lines of customers formed outside the New India Co-operative Bank in Mumbai as anxious depositors sought to withdraw their funds. This surge in activity followed the Reserve Bank of India’s (RBI) decision on Thursday to implement various restrictions, including limitations on withdrawals, due to ongoing supervisory concerns.
The RBI’s directives for New India Co-operative Bank in Mumbai took effect at the end of business on Thursday and will be in place for six months, pending review.
In light of the bank’s current liquidity situation, the RBI has instructed that no withdrawals can be made from savings, current, or any other depositor accounts.
Nevertheless, the bank is permitted to offset loans against deposits, provided it adheres to the specified conditions.
Funds for expenditure may be allowed for critical items like employee salaries, rent, and utility bills.
Additionally, the RBI stated that starting from the end of business on February 13, 2025, the bank is prohibited from granting or renewing any loans and advances, making investments, or incurring any liabilities, including the acceptance of new deposits, without prior approval.
The central bank stated that these measures are required due to supervisory issues arising from recent significant developments within the bank, aimed at safeguarding the interests of the bank’s depositors.
Additionally, eligible depositors will be entitled to receive a deposit insurance claim of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
One of the customers was worried while speaking to ANI said, “We deposited money just yesterday, but no one warned us about this. Now, they say we’ll get our money in three months, but we have EMIs and bills to pay. How are we supposed to manage?”
