Panic Among Customers as RBI Imposes Restrictions on New India Co-operative Bank

Panic Among Customers as RBI Imposes Restrictions on New India Co-operative Bank

Massive Customer Rush at Bank Branches

After the Reserve Bank of India (RBI) imposed severe restrictions on Mumbai-headquartered New India Co-operative Bank Limited, panic-stricken customers rushed to its branches to withdraw their savings. The uncertainty surrounding their hard-earned money led to large crowds gathering at multiple branches in Mumbai, Thane, Surat, and Pune.

Customers Express Fear and Frustration

Several account holders expressed distress, citing difficulties in accessing their funds.

🔹 Ashok Shetty, a customer, lamented that he needed his deposits for daily expenses and school fees but was informed that no withdrawals would be allowed for six months.

🔹 A senior citizen shared that he had attempted to withdraw his ₹1 lakh savings but was unsuccessful.

🔹 Naveen, another senior citizen, stated that even updating passbooks would help them lodge complaints later.

🔹 Kiran Reddy, a customer for over 40 years, expressed distrust in banks, questioning why customers were not warned in advance.

🔹 Seema Waghmare, who had deposited money just a day before the restrictions, was worried about paying EMIs without access to her funds.

🔹 Another customer pointed out that regular citizens, not big businessmen, were the ones affected.

RBI’s Restrictions on the Bank

On Thursday, February 13, 2025, the RBI barred New India Co-operative Bank from:

❌ Granting or renewing loans and advances
❌ Making new investments
❌ Incurring liabilities, including borrowings and fresh deposits
❌ Disbursing payments (except under RBI-specified conditions)
❌ Entering into any compromises or property sales

The RBI cited liquidity concerns and supervisory issues, stating that the move was aimed at protecting depositors’ interests.

Deposit Withdrawals & Limited Operations

The RBI directed that no withdrawals would be allowed from savings or current accounts, though loans could be set off against deposits under specific conditions.

However, the bank can continue paying salaries, rent, and utility bills as per RBI’s limits.

What Happens to Depositors’ Money?

🔹 Deposit Insurance: Eligible depositors will receive up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
🔹 Customers need to submit their willingness and undergo verification to claim their funds.
🔹 The RBI clarified that the bank's license is not canceled but will remain under restrictions for six months, subject to review.

Bank’s Background

📌 Established over 40 years ago
📌 Achieved "Scheduled Bank" status in 1990
📌 Attained "Multi-State" status in 1999
📌 Operates 30 branches across Mumbai, Thane, Surat, and Pune

What’s Next for Customers?

🔹 Customers are advised to contact bank officials for further details.
🔹 Updates can also be checked on the DICGC website (www.dicgc.org.in).
🔹 RBI will monitor the situation and may modify restrictions based on financial stability.

Conclusion

The RBI’s action on New India Co-operative Bank has raised serious concerns about customer protection, financial transparency, and banking stability. With people unable to access their own savings, questions arise about how banking institutions should be held accountable.

💬 What do you think? Should there be stricter regulations for cooperative banks? Share your thoughts below!