RBI supersedes New India Cooperative Bank board for 12 months

Consequently, the RBI has appointed Shreekant, former Chief General Manager of State Bank of India (SBI) as 'Administrator' to manage the affairs of the bank during this period.

The RBI has also appointed a 'Committee of Advisors' to assist the Administrator in discharging his duties. The members of the Committee of Advisors are Ravindra Sapra (former General Manager, SBI) and Abhijeet Deshmukh (Chartered Accountant).

The action was necessitated "due to certain material concerns emanating from poor governance standards observed" in the Mumbai-headquartered New India Cooperative Bank Ltd.

This morning, customers gathered in hundreds outside Mumbai-headquartered New India Co-operative Bank Limited branches to withdraw their hard-earned savings, soon after the Reserve Bank of India imposed several restrictions on the lender.

Panicky account holders converged outside the bank branches spread across Mumbai city, worried over the fate of their bank savings and lockers.

The people ANI spoke to said that bank officials have assured them access to their lockers.

Late on Thursday, the RBI directed New India Co-operative Bank Limited, Mumbai that it shall not, without prior written approval of the central bank, grant or renew any loans and advances, make any investment, incur any liability including borrowing 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 by the RBI.

Considering the cooperative bank's present liquidity position, the RBI has directed not to allow the 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 RBI conditions.

The bank can incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, -- but only as specified by the RBI.

These directions against the Bank were 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 RBI said, while slapping the restrictions.

The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5 lakh in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification.

The depositors have been advised to contact bank officials for further information and details can be accessed on the DICGC website.

"The issue of the above Directions by the RBI should not per se be construed as cancellation of banking license by RBI. 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," the RBI said in its Thursday order.

These directions against New India Co-operative Bank Limited, Mumbai is set to remain in force for a period of six months from the close of business on February 13, 2025 and are subject to review.

During the past four decades of its operations, the Bank has established 30 branches, which are located in Mumbai, Thane, Surat and Pune, according to its website. The bank achieved a "scheduled bank " status on November 1, 1990. The bank achieved a "multi-state status" on October 22, 1999. (ANI)