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In a big relief to depositors, the Reserve Bank of India (RBI) has permitted withdrawals of up to ₹25,000 for depositors of New India Co-operative Bank Ltd, the RBI announced in a release.
After assessing the bank’s liquidity with the administrator, the RBI has decided to grant relief to depositors by allowing withdrawals of up to ₹25,000 per depositor or the balance available in their account, whichever is lower, with effect from February 27, 2025, the release added.
“With above relaxation more than 50 per cent of the total depositors will be able to withdraw their entire balances and the remaining depositors can draw upto ₹25,000 from their deposit accounts,” the RBI noted.
The apex bank shared that the depositors can withdraw their money through the bank’s branches as well as its ATMs.
The central bank mentioned that it has restructured the Committee of Advisors (CoA) to the Administrator, with the changes coming into effect from February 25, 2025. “There is no change in the Administrator (Shri Shreekant). The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank.”
Earlier in February, the RBI had imposed All Inclusive Directions (AID) restrictions on the Mumbai-based New India Co-operative Bank, restricting it from issuing new loans or allowing withdrawals for the next six months.
The New India Co-operative Bank was given strict directions that:
- The bank cannot grant or renew loans and advances.
- The bank cannot accept fresh deposits.
- The bank cannot make new investments or sell its assets.
The apex bank attributed its decision to ‘recent material developments’ at the bank indicating a worsening financial health of the New India Co-operative Bank.
The New India Co-operative Bank has been grappling with financial challenges for the past few years. In the financial year March 2024, it recorded a loss of ₹22.78 crore, following an even steeper loss of ₹30.75 crore in FY23.
Bank depositors should be aware that deposits at New India Co-operative Bank are insured up to ₹5 lakh per depositor by the Deposit Insurance and Credit Guarantee Corporation (DICGC). This coverage includes both the principal amount and interest.
Even in the event of a bank failure, the deposits remain protected by the DICGC, covering all account types, including savings, fixed, current and recurring deposit accounts.
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