Mumbai (Maharashtra) [India], February 14 : The Reserve Bank of India (RBI) on Friday issued a notice imposing restrictions on New India Co-operative Bank Limited, Mumbai, barring it from carrying out financial operations without prior approval.
"It is hereby notified for information of the public that...the Reserve Bank of India (RBI) ...has issued certain Directions to New India Co-operative Bank Limited, Mumbai ("the bank"), whereby, as from the close of business on February 13, 2025, the bank shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in the discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Direction dated February 13," the RBI notice read.
According to the RBI notice, "Considering the bank's present liquidity position Bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor but is allowed to set off loans against deposits subject to the conditions stated in the RBI Directions."
The RBI, however, gave relaxation to New India Co-operative Bank Limited in respect of certain essential items such as salaries of employees, rent, electricity bills, etc. "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 notice read.
The Central bank further directed that depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5,00,000 in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Giving relief to the Bank the RBI notice said that these directions should not be taken as the cancellation of a banking license. "The bank will continue to undertake banking business subject to restrictions specified in the said Directions till its financial position improves. The RBI continues to monitor the position of the bank and will take necessary actions including modifications of these Directions, as warranted, depending upon circumstances and in the interest of the depositors," it said.
These directions on the Bank will remain in force for a period of six months from the close of business on February 13 and RBI will further review the Bank;'s activities, the RBI notice added.
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