Reserve Bank Of India / RBI gave big relief to New India Co-operative Bank customers

The Reserve Bank of India imposed all-inclusive directions on New India Co-operative Bank Ltd, Mumbai on February 13, 2025, preventing account holders from making withdrawals. Later, withdrawals of up to ₹25,000 per depositor were allowed from February 27. Bank CEO arrested in Rs 122 crore fraud.

Reserve Bank Of India: The Reserve Bank of India (RBI) imposed strict all-inclusive directions (AID) on New India Co-operative Bank Limited, Mumbai on February 13, 2025, under which the bank was directed not to allow its depositors to withdraw funds from any account. This step was taken to ensure transparency in the financial position and operations of the bank.

RBI intervention and administrative changes

After this, the RBI dissolved the board of directors of the bank on February 14, 2025 and appointed an administrator and an advisory committee (COA) to run the bank. After reviewing the liquidity position of the bank, the RBI has decided to allow withdrawals of up to ₹ 25,000 per depositor from February 27, 2025. This relief will give an opportunity for partial refund to most of the depositors of the bank.

Withdrawal process and facilities

According to RBI, under this relaxation, more than 50 percent of the total depositors will be able to withdraw their entire deposit amount, while the rest of the depositors will be able to withdraw a maximum of ₹ 25,000. Depositors can also use ATM services in addition to bank branches for this withdrawal. However, this facility will be available only to the extent of either ₹ 25,000 or the balance available in the depositor's account, whichever is less.

Dissolution of the board of New India Co-operative Bank

RBI this month dissolved the bank's board of directors for 12 months and the responsibility of operation was handed over to former SBI Chief General Manager Srikant. Along with this, an advisory committee has also been formed to assist in the operation and reorganization of the bank.

Fraud allegations and arrest of bank CEO

The Economic Offences Wing (EOW) of Mumbai Police has arrested Abhimanyu Bhoan (45), the former CEO of the New India Co-operative Bank, in connection with the Rs 122 crore fraud at the bank. He was associated with the bank since 2008 and was working as IT Vice President. He was appointed CEO of the bank in 2019.

Conclusion

The RBI ban on New India Co-operative Bank Limited and the relaxation in withdrawal limits have brought some relief to the affected depositors. However, it will be necessary to keep an eye on the steps taken by the RBI to stabilize the financial position of the bank and secure the entire amount of depositors.