Mumbai: Customers of New India Co-Operative Bank were in for a rude shock on Friday after the Reserve Bank of India (RBI) imposed severe restrictions on the Mumbai-based bank on Friday due to concerns over its financial stability.
Cash withdrawals from savings, current, or any other accounts have been barred, and the bank has also been directed not to offer new loans or deposits.
“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 RBI notice reads.
The RBI said these restrictions should not be interpreted as a suspension of the bank’s licence, and the bank will continue its operations under the specified limitations.
The RBI assured that it was closely monitoring the bank’s situation and will take necessary steps, including modifying the directions, as required, to safeguard the interests of depositors.
As the word spread, people gathering outside different branches of the New India Co-operative Bank in Mumbai bank’s branches, seeking clarity.
Panic-stricken account holders wanted answers about when they will be able to access their money, but the bank’s customer support services and mobile app were down. According to reports, most people gathered outside the Vijayanagar branch in Andheri were given coupons by the bank, allowing them to access their lockers.
“The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) 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 depositors may contact the bank officials for further information,” RBI stated.
