RBI Puts New India Co-operative Bank's Operations on Hold

Mumbai, India: The Reserve Bank of India (RBI) has imposed restrictions, issuing a notice on Friday on New India Co-operative Bank Limited in Mumbai, effective from the close of business on Thursday.

As of February 13, 2025, the bank is barred from granting loans, accepting new deposits, making investments and disbursing payments without prior RBI approval.

The RBI has put this bank under restrictions because of some financial problems. The bank can’t give new loans or invest money.

Also, read| Income Tax Bill 2025 Set To Transform Taxation System: Expert Insights

Customers can’t take out their money from savings or current accounts. But customers might get up to Rs 5 lakh back if something goes wrong.

The bank can still pay important bills like salaries and rent. These restrictions will be in place for six months, and the RBI will review the situation. The RBI wants to help the bank fix its problems and keep customers’ money safe.

According to RBI, the bank cannot grant or renew loans, make investments, or incur any liabilities.

Depositors may be eligible to claim deposit insurance of up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC). The bank is allowed to set off loans against deposits under specific conditions. Essential expenses, such as salaries, rent, and electricity bills, can still be paid.

Following these restrictions, long lines formed outside several branches of the bank, with customers anxiously seeking information. At the Mahavir Nagar branch in Kandivali West, people waited in confusion, seeking some assistance.

Also, read| Here’s How India’s New Income Tax Bill Affects NRIs And Their Foreign Income

Many account holders, including senior citizens, gathered outside the Vijayanagar branch in Andheri, Mumbai, worried about their savings.

Mumbai, Maharashtra: People gather outside the New India Co-operative Bank after the RBI issued a notice to halt all business pic.twitter.com/rruTw1mhGM

— Chris Wealth Management Pvt Ltd (@chriswealthman1) February 14, 2025

Bank officials gave them coupons to access their lockers but didn’t clearly explain what would happen to their deposited money.