The Reserve Bank of India (RBI) on Friday superseded the Board of Directors of New India Co-operative Bank for a period of 12 months. The central bank has appointed Shreekant, former Chief General Manager of State Bank of India (SBI), as administrator to manage the affairs of the bank during the period.
Earlier on Thursday, the RBI imposed several restrictions on city-based New India Co-operative Bank, including on the withdrawal of funds by depositors, amid supervisory concerns.
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.
The lender, however, is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions.
“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.
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).
Meanwhile, hundreds of customers gathered outside Mumbai-headquartered New India Co-operative Bank Limited branches to withdraw their money.
The account holders, while standing in long queues outside the bank, were worried over the fate of their bank savings and lockers.
“We are clueless as no information is being provided by the bank. I got the information that the bank is allowing customers to operate locker but we have been standing for hours and nothing is happening,” a customer said.
“I deposited money 3-4 days back and at that time the bank did not tell us about any such situation. Our money is deposited in this bank and EMIs are debited from this account. We have no idea what will happen with our money,” another customer said.
This is a developing story.
