Kolkata: One of the key areas of responsibility for banking regulator the Reserve Bank of India is to safeguard the interest of depositors of Indian banks. On the morning of February 14, 2025, long queues of concerned customers, many of whom are senior citizens, have been seen outside the branches of New India Co-operative Bank.
Angry customers said that they could not conduct virtually any transaction and that even customer services of the bank were not responding to their query and the management was unreachable. However, RBI has clarified that its action was directed at ensuring that the interests of the customers are protected.
What services has the RBI barred
Acting out of concern to protect customer/depositor interest, RBI has stopped the management of New India Co-operative Bank from conducting a wide array of transactions. These are:
- The bank cannot accept new deposits from anyone
- The bank cannot grant any loan to anyone, or renew/extend any loan to any customer
- The bank cannot disburse any payment to any party
- The bank management cannot sell off any property of the bank
Six months: The initial period of RBI restrictions
The RBI’s measures against the Mumbai-based cooperative bank will be in effect for an initial period of six months at the end of which the RBI will review it. “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… These directions are necessitated due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interest of depositors of the bank,” RBI mentioned in a statement. Significantly, New India Co-operative Bank had deposits worth Rs 2,436 crores at the end of FY24. According to rules, Deposit Insurance and Credit Guarantee Corporation (DICGC) safeguards deposits through insurance claims but the ceiling on this feature is Rs 5 lakh per customer.
Banking regulator Reserve Bank of India has barred Mumbai-based New India Co-operative Bank from conducting a wide array of services after taking note of its precarious liquidity position. To know what are the services on which RBI has put curbs from February 14, please read on. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
