Queues of people were seen outside Mumbai-based New India Co-operative Bank as worried customers want to withdraw their money after the Reserve Bank of India (RBI) on Thursday imposed several restrictions, including on the withdrawal of funds by depositors, amid supervisory concerns.
Account holders gathered outside the Vijayanagar branch in Andheri, Mumbai. Customers are confused about when they will get their money. Some even said that the bank is not responding to their queries and even its customer support services and app are not functioning.
Most of the people gathered outside the bank are senior citizens. Bank officials have given coupons to those standing in queue. According to them, customers can use these coupons to access their lockers.
The Reserve Bank’s Directions to New India Co-operative Bank, Mumbai came into force from the close of business on Thursday and would remain in force for a period of six months and are subject to review.
“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.,” the RBI said.
The lender, however, is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions.
It may incur expenditure in respect of certain essential items such as salaries of employees, rent, and electricity bills.
RBI further said that from the close of business on February 13, 2025, the bank shall not, without prior approval, grant or renew any loans and advances, make any investment, and incur any liability, including acceptance of fresh deposits.
“These directions are necessitated due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interest of depositors of the bank,” the central bank said.
Further, eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).