RBI Trying To Restore Normal Operations Of New India Co-Operative Bank Limited At The Earliest: Sources | Exclusive

Last Updated:February 14, 2025, 17:21 IST

According to the sources, the administrator and advisers have been tasked with quickly assessing the situation, restoring normal banking business operations at the earliest, and trying to revive the bank as soon as possible

The RBI imposed restrictions on withdrawals as a precautionary measure to safeguard the interests of depositors of New India Co-operative Bank Limited. Pic/PTI

The Reserve Bank of India (RBI) is trying to restore normal banking business operations at the earliest in New India Co-operative Bank Limited, sources have told CNN-News18.

According to them, the administrator and advisers have been tasked with quickly assessing the situation, restoring normal banking business operations at the earliest, and trying to revive the bank as soon as possible.

“It is reiterated that customer deposits are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover, up to Rs 5 lakh per depositor, in the same right and capacity. More than 90 per cent of the 1.3 lakh depositors of the bank are fully covered under the deposit insurance,” a source said.

After a spot inspection by RBI, the bank’s chief compliance officer filed a complaint with the Economic Offences Wing (EOW) of the Mumbai police on February 13, 2025, regarding the alleged misappropriation of funds by some staff.

The RBI imposed restrictions on withdrawals as a precautionary measure to safeguard the interests of depositors.

The RBI superseded the bank’s board for mismanagement and appointed an administrator along with a committee of advisers, including a chartered accountant, to secure proper management of the bank.

“Considering the bank’s present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor but is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions. The bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, etc,” the RBI said in a statement on Thursday.

“The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5,00,000 in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification,” the statement said further.

New India Co-operative Bank has been grappling with losses in the last two fiscal years, with the bank posting a loss of Rs 23 crore in the financial year ended March 2024 and a loss of Rs 31 crore in fiscal 2023, according to its annual report.

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