The Reserve Bank of India (RBI) has placed several restrictions on Mumbai-based New India Co-operative Bank. Amid regulatory concerns, the central bank prohibited depositors from taking any money out of the bank and limited lenders from making any advances or extending any loans.
“The bank shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Direction," the central bank stated in an RBI Direction issued on February 13, 2025.
Till When will New India Co-operative Bank be Closed?
These restrictions started at the end of business hours on Thursday and will continue for six months. However, the Reserve Bank of India (RBI) may review the situation and decide whether to extend or lift the restrictions based on further assessments.
What is Not Allowed?
The RBI's directive states that the New India Co-operative Bank is not permitted to engage in these activities till further notice.
- Disburse advances or loans.
- Renew advances or loans.
- Make any kind of investment.
- Take in new deposits
- Liability through borrowing money
- Pay off debts or responsibilities
- Consent to sell, transfer, or otherwise get rid of any of its assets or properties
What is Allowed?
There are certain activities that RBI has allowed the New India Co-operative Bank to do while facing regulatory concerns:
- Pay employees a salary.
- Make rent, electricity, and other bill payments.
- Set off loans against deposits in accordance with RBI guidelines.
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What should the Costumers do Now?
The Reserve Bank of India (RBI) also shared information on what customers of New India Co-operative Bank can do next. It stated that eligible depositors can claim up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per the rules of the DICGC Act, 1961. To receive this amount, depositors must submit their request and go through a verification process.
The regulator also stated that it is not revoking the bank's banking license. According to the RBI, the bank would carry on with its banking activities while adhering to the limitations outlined in the most recent directive.
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