The Reserve Bank of India (RBI) has prohibited the New India Co-Optive Bank based in Mumbai from issuing new loans and withdrawal of deposits suspended for six months. The Central Bank has cited supervision concerns and liquidity problems of the lender on the unprecedented decision.
RBI’s decision prevents depositors from withdrawing funds because the bank faces liquidity problems. Shortly after the announcement, anxious customers were seen to queue outside of various branches of New India Co-Optive Bank.
The RBI has announced that the closing of cases on February 13, 2025, the New India Co-Optive Bank is prohibited to grant or renew loans or advances. Nor can he make new investments or accept new deposits. Nor is it authorized to pay payments. The bank is not authorized to eliminate any of its properties or to make investments or to borrow funds.
Instructions were necessary due to concerns resulting from “recent material developments” to the bank and to protect the interests of the depositors, said the RBI. However, he did not develop the details of these concerns.
The Central Bank added that eligible depositors have the right to assist deposit insurance until Rs 5 Lakh, in accordance with the insurance insurance scheme. The depositors were invited to submit their complaints to the bank. At the end of March 2024, the New India Co-OP Bank had deposits worth 2,436 belpaies and advances worth 1,175 belles.
He reported a loss of Rs 22.78 crosses for the FY24 and RS 42.11 crosses during fiscal year 23.
In April 2024, in a similar decision, the RBI had restricted the Kotak Mahindra Bank from new integrated customers via its online and mobile banking channels and the emission of fresh credit cards. However, Wednesday, RBI had raised the borders of Kotak Mahindra bank after satisfactory compliance with regulatory requirements.
