Mumbai: The Reserve Bank of India (RBI) on Friday superseded the board of New India Co-operative Bank citing poor governance standards. The central bank authority took the step a day after imposing several restrictions on the city-based bank. The bank has 28 branches, mostly located in the Mumbai region.
The RBI superseded the Board of Directors of New India Cooperative Bank Ltd for a period of 12 months. Former chief general manager of State Bank of India (SBI) was appointed as ‘Administrator’ to manage the affairs of the bank. A ‘Committee of Advisors’ was also appointed to assist the Administrator in performing his duties. The members of the Committee of Advisors are Ravindra Sapra (former General Manager, SBI) and Shri Abhijeet Deshmukh (Chartered Accountant).
The RBI released an official statement stating that Shreekant was appointed ‘Administrator’ to manage the affairs of the bank for 12 months.
“The action is necessitated due to certain material concerns emanating from poor governance standards observed in the bank,” it said.
Restrictions Imposed on New India Co-operative Bank
The Reserve Bank on February 13, 2205 imposed several restrictions on New India Co-operative Bank for a period of six months and are subject to review. The restrictions include, withdrawal of funds by depositors, amid supervisory concerns.
Meanwhile, huge number of New India Co-operative Bank customers gathered at its branches on Friday following RBI’s restrictions. The central banking authority has barred the lender from issuing new loans and suspension of deposit withdrawals for six months.
“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…,” the RBI said while imposing the restrictions.
The RBI has allowed the bank to set off loans against deposits subject to the conditions stated in the RBI directions, which include essential items such as salaries of employees, rent, and electricity bills.
The Reserve Bank of India (RBI) superseded the board of New India Co-operative Bank due to poor governance. Following earlier restrictions on withdrawals and lending, an administrator was appointed for a year. A committee of advisors will assist, aiming to stabilize the bank’s financial situation and address the concerns raised by the RBI. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
