Mumbai: RBI Imposes Restrictions on New India Co-operative Bank Over Supervisory Concerns

The Reserve Bank of India (RBI) has imposed restrictions on New India Co-operative Bank Limited, Mumbai, citing supervisory concerns. The directives, issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, came into effect from the close of business on February 13, 2025, and will remain in force for six months, subject to review.

According to Direction, the bank cannot grant or renew loans, make investments, accept fresh deposits, or disburse payments without RBI’s prior approval. Additionally, withdrawals from all types of accounts have been restricted, except for loan set-offs against deposits under specified conditions.

However, the bank is permitted to incur essential expenses, including salaries, rent, and utility bills. The RBI clarified that these restrictions should not be construed as a cancellation of the bank's license, and the bank will continue to function under supervision.

To safeguard depositors’ interests, eligible depositors can claim up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, subject to verification. Depositors are advised to contact the bank officials or visit www.dicgc.org.in for further details.

The RBI has assured continuous monitoring of the bank’s financial position and may modify the restrictions as required in the interest of depositors.

Since this morning, customers arriving at the bank for transactions were informed that no transactions would be allowed for the next six months as per the RBI guidelines. This led to chaos at the bank’s branches, with customers expressing frustration over the sudden restrictions.​