Breaking: Customers in panic as RBI freezes New India Co-operative Bank's operations, withdrawals halted

(PIC/NIMESH DAVE)

Customers of the New India Co-operative Bank have been left in shock and uncertainty after the Reserve Bank of India (RBI) issued strict restrictions on the bank's financial operations. The decision, which came into effect on 13 February 2025, bars the bank from granting loans, accepting new deposits, making investments, or disbursing any payments without prior approval from the RBI.

IN PHOTOS: Customers in distress as RBI imposes severe restrictions on New India Co-operative Bank

1 month agoPHOTO GALLERY

Soon after the announcement, long queues formed outside several branches of the bank, with customers desperately seeking answers. At the Mahavir Nagar branch in Kandivali West, people waited in confusion, hoping for some relief.

Seema Waghmare, a customer, expressed her frustration: "We deposited money just yesterday, but they did not inform us. If they knew this was going to happen, they should have told us. Now they say we will get our money within three months. But what about our EMIs and daily expenses?"

At the Vijayanagar branch in Andheri, Mumbai, a large number of account holders, many of them senior citizens, gathered outside, anxious about their savings. Bank officials distributed coupons to customers, allowing them to access their lockers, but no clear instructions were given regarding their deposits.

According to the RBI's official statement, the bank has been placed under financial restrictions due to supervisory concerns and recent material developments. The key points of the directive are:

1. The bank cannot grant or renew loans, make investments, or incur liabilities.
2. No customer withdrawals are allowed from savings, current, or other accounts.
3. Depositors may be eligible for a deposit insurance claim of up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
4. The bank is permitted to set off loans against deposits under certain conditions.
5. Essential expenses such as salaries, rent, and electricity bills can still be paid.

The restrictions will remain in place for six months, subject to review. The RBI clarified that these actions should not be seen as a cancellation of the bank's licence. The bank will continue its operations but with significant limitations.

The biggest concern for customers is access to their money. Many expressed anger at the lack of communication from the bank. Some even reported that the bank's customer support services and mobile app were not functioning.

A senior citizen waiting outside the bank said, "I have my life savings here. How am I supposed to manage without access to my money? We are not even getting proper answers."

The RBI has assured depositors that it will monitor the situation and take necessary actions in their best interest. However, the uncertainty surrounding the bank's financial health raises concerns about how long it will take for customers to regain access to their funds.

(With inputs from ANI)