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Informist, Thursday, Feb. 13, 2025

--RBI imposes business restrictions on New India Co-operative Bank 

--RBI: New India Co-operative Bank to not give loans, take deposits from Thu 

--RBI: Told New India Co-operative Bk no withdrawals from depositors' accts 

--RBI: Eligible New India Co-op Bk depositors can claim deposit insurance 

--RBI: Restrictions on New India Co-op Bk to remain in force for 6 months 

--RBI:New India Co-op Bk will still conduct business subject to restrictions 

MUMBAI – The Reserve Bank of India has imposed business restrictions on New India Co-operative Bank, including a ban on giving fresh loans and accepting deposits. "These directions are necessitated due to supervisory concerns emanating from the recent developments in the bank, and to protect the interest of depositors of the bank," the RBI said in a release Thursday. The restrictions will remain in force for six months.

Under these restrictions, the cooperative bank cannot grant or renew loans, make investments, incur liabilities, including borrowing of funds, and accept fresh deposits without prior approval of the RBI. It also cannot sell or transfer any of its properties or assets.

Considering the bank's present liquidity position, RBI has directed the bank not to allow the withdrawal of any amount from the savings bank or current accounts but can set off loans against deposits, subject to the RBI guidelines.

"The bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, as specified in the said directions," the release said. 

The eligible depositors would be entitled to receive the deposit insurance claim amount on their deposits up to INR 500,000, RBI said. These restrictions should not construed as a cancellation of the bank's licence, the RBI said. "The bank will continue to undertake banking business subject to restrictions specified in the said directions till its financial position improves. The RBI continues to monitor the position of the bank and will take necessary actions including modifications of these directions, as warranted, depending upon circumstances and in the interest of the depositors," the release said.  End

Reported by Kshipra Petkar

Edited by Saji George Titus

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