After the ban by RBI, New India Co-operative Bank will neither be able to give any loan nor take any deposit. This ban has come into effect from 13 February 2025 for the next six months. This will also cause trouble to the customers as they will no longer be able to withdraw their money deposited in their bank. Let us know what is the whole matter?
The banking sector regulator Reserve Bank of India (RBI) has imposed several restrictions on the functioning of Mumbai-based New India Co-operative Bank. This will have the biggest impact on the customers of the bank, who will no longer be able to withdraw their hard-earned money.
Effect of RBI ban
After the RBI ban, New India Co-operative Bank will no longer be able to give any loan nor take any deposit. This ban has come into effect from 13 February 2025 for the next six months. This will also cause trouble to the customers, as they will no longer be able to withdraw their money deposited in their bank. However, during this time RBI will closely examine the functioning of the bank and it can also give necessary concessions after the ban period ends.
What did RBI say about the ban?
RBI said in its statement, “Keeping in view the existing cash (liquidity), the bank has been directed not to allow any depositor to withdraw money from savings account, current account or any other account.” However, the bank is allowed to set off the loan against the deposits, provided it is in accordance with the instructions issued by the RBI. Apart from this, the bank can spend on essential things like salary, rent and electricity bills.
#WATCH | Mumbai: Seema Waghmare, a customer of the New India Co-operative Bank, says, “We deposited money just yesterday, but they did not say anything… They should have told us that this was going to happen… They are saying that we will get our money within 3 months… We… pic.twitter.com/wrIiQp472D
— ANI (@ANI) February 14, 2025
Why did RBI impose a ban?
RBI says that it has found serious flaws in the functioning of New India Co-operative Bank. It has issued instructions to impose strict restrictions on the bank to protect the interests of the depositors. RBI has clarified that after the closure of the business of the bank on February 13, 2025, the bank will not give or renew any loan or advance amount without its permission.
What will happen to the customers now?
According to RBI’s instructions, the customers of New India Co-operative Bank will no longer be able to withdraw their deposits. If RBI gives any relief to the bank after investigation, then the customers will be able to withdraw their money. In case this does not happen, the depositors will get an insurance claim of up to Rs 5 lakh on their deposits. This claim will be available from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
