Reserve Bank Of India / Even after banning this bank, RBI dissolved its board and handed over the responsibility

Reserve Bank Of India: The Reserve Bank of India (RBI) has dissolved the Board of Directors of New India Co-operative Bank Limited for 12 months. During this period, the responsibility of running the bank has been handed over to former Chief General Manager of State Bank of India (SBI) Srikant, who has been appointed as the administrator. Also, an advisory committee has also been formed to assist the administrator, which includes former SBI General Manager Ravindra Sapra and Chartered Accountant Abhijit Deshmukh.

RBI imposed strict restrictions on the bank

The Reserve Bank of India has imposed several restrictions on New India Co-operative Bank from February 14. Under these restrictions, the customers of the bank cannot withdraw any amount from their account. According to a PTI report, this decision has been taken in view of the current financial position of the bank. Apart from this, the restrictions will remain in force on the bank for the next 6 months, and during this period the RBI will review the situation from time to time.

Customer concerns and deposit insurance

As soon as the new restrictions came into force, a huge crowd of customers was seen outside the bank branches. People are worried that they cannot withdraw money from their accounts. However, the RBI has also clarified that the depositors' deposits up to Rs 5 lakh are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that eligible depositors of New India Co-operative Bank can claim insurance up to a maximum amount of Rs 5 lakh.

Ban on banking activities

As per RBI instructions, the bank can no longer issue any new loan or advance without pre-approval. Apart from this, the bank will no longer accept new deposits from any customer nor allow withdrawals from any account. This decision has been taken with the aim of maintaining the financial stability of the bank.

Way forward

The main objective of these steps taken by the RBI is to maintain the stability of the banking system and protect the interests of the depositors. The Administrator and Advisory Committee will work together to improve the current financial position of the bank. In the meantime, RBI will continue to monitor the condition of the bank and take further decisions as required.

In view of this development, the bank's customers and investors need to remain alert. Until any new announcement comes from RBI, depositors should maintain patience and contact official sources for more information.