RBI imposes restrictions on new India Co-op bank, customers panic over EMIs
The Reserve Bank of India (RBI) imposed severe restrictions on New India Co-operative Bank on February 13, 2025, following supervisory concerns. The restrictions, effective for six months, aim to address the bank’s liquidity issues. Customers were immediately impacted, and many rushed to the bank in panic.
One customer, Seema Waghmare, expressed her frustration on social media, stating that she had deposited money the day before and was not informed about the restrictions. “We have EMIs to pay, and we don’t know how we will manage,” she said, highlighting the anxiety among customers.
The RBI ordered the bank to halt all withdrawals from savings, current, and other accounts. Only certain transactions, such as setting off loans against deposits, are permitted. The bank can still cover expenses like employee salaries and rent.
Furthermore, the bank is prohibited from issuing new loans, renewing advances, or accepting fresh deposits without prior approval from the RBI. The central bank justified these measures to safeguard depositor interests and address the bank’s financial challenges.
Despite these restrictions, eligible depositors are entitled to insurance coverage of up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). This insurance aims to reassure depositors during the period of uncertainty.
