The Reserve Bank of India (RBI) today barred New India Co-operative Bank from granting or renewing loans, accepting fresh deposits, make investment, disbursing any payment for its liabilities or selling any of its properties due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interest of depositors of the bank, the regulator said in a statement.
“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 but is allowed to set off loans against deposits,” the statement said.
Eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
These directions, however, should not be seen as cancellation of banking license by RBI. The bank will continue to undertake banking business subject to restrictions specified in the said directions till its financial position improves. The RBI will continue to monitor the position of the bank and will take necessary actions, in the best interest of the depositors. These directions shall remain in force for a period of six months from the close of business on February 13, 2025 and are subject to review.