Panicky customers flock to New India Co-operative Bank branches after RBI restrictions

Mumbai: 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.

Ashok Shetty, an account holder, talking to ANI outside a branch, said, “I am finding it difficult to meet my daily needs. I withdraw money regularly (from this bank) for my needs. I have to pay the fees of my wards, and I need money for it. Bank officials here are saying we won’t get any money for six months… I have Rs 6 lakh in this bank.”

Another account holder, a senior citizen, said, “Hardship is obvious as the Bank got closed. I wanted to withdraw money but could not. I have filled a cheque, let’s see if gets through.” He said he has a bank balance of about Rs 1 lakh.

Facing difficulties in withdrawing money, Naveen, another senior citizen, said, “Even if they allow us to update our passbook, that is also fine for us. It would be easier for us to later make our complaints and claims later.”

“I want to ask them why are bothering so many of us. Look, do you see any big businessman queuing here, all are regular citizens,” he said, pointing to the gathering outside the bank where he was standing.

Kiran Reddy, another customer of the bank for over four decades, said, “This bank got closed. How will we trust big banks? Why do we park our money here?… There has been no communication from the bank since the news broke out.”

Seema Waghmare, who holds an account at the New India Co-operative Bank said, “We deposited money just yesterday, but they did not say anything… They should have told us that this was going to happen… They are saying that we will get our money within six months… We have EMIs to pay, we have no idea how we will do all of that…?”

“I talked to the Bank official. The official is not saying anything clearly. Though they assured us we would get our money in 90 days but remained tight-lipped about how much we will get. There is no clarity. I have several liabilities and I have to pay it,” said another customer who has a current account at the bank.

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

“Which bank do we trust? I have Rs 50,000 in balance in this Bank along with the locker,” another bank account holder, in the long queue outside a bank branch, said.

Bhupendra, another account holder, also voiced a similar concern and added, “We have to face it now. We don’t have any other option — if we have landed in trouble. Not all banks are the same but yes we need to certain measures where customers are not taken for granted.”

Late on Thursday, the RBI directed New India Co-operative Bank Limited, Mumbai it shall not, without prior approval of it 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 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 bank’s present liquidity position, the RBI has 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 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 may contact the bank officials for further information. Details may also be accessed on the DICGC website: www.dicgc.org.in

“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 shall 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.