New India Co-operative Bank: The Reserve Bank of India (RBI) on Monday permitted depositors of crisis-hit New India Co-operative Bank to withdraw up to Rs 25,000 with effect from February 27. Earlier on February 13, the Central bank had imposed All Inclusive Directions (AID) on the Mumbai-based cooperative bank, and the bank was directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor.
With the relaxation, more than 50 per cent of the total depositors will be able to withdraw their entire balances and the remaining depositors can draw up to Rs 25,000 from their deposit accounts.
"The Reserve Bank, after reviewing the bank’s liquidity position in consultation with the Administrator, has decided to allow a deposit withdrawal of up to Rs 25,000 per depositor, with effect from February 27, 2025. With above relaxation more than 50 per cent of the total depositors will be able to withdraw their entire balances and the remaining depositors can draw up to Rs 25,000 from their deposit accounts. The depositors may use the branch as well as ATM channel of the bank for this withdrawal, however, aggregate amount that can be withdrawn will be Rs 25,000 per depositor or the balance available in their account whichever is lower," said RBI in a statement.
New India Co-operative Bank case
The issue pertains to misappropriation of funds by some staff members of the bank, they said, without revealing the overall amount or the identities of the people involved. The bank's general manager Hitesh Mehta is accused of misappropriating a total of Rs 122 crore in cash from the bank's safe over a period of time.
The RBI had prohibited the bank from issuing new loans and suspended deposit withdrawals, and followed it up by superseding the bank's board for mismanagement on Friday.
Later, the RBI superseded the Board of Directors of New India Cooperative Bank for a period of 12 months. It also appointed Shreekant, former Chief General Manager of State Bank of India (SBI), as Administrator to manage the affairs of the bank during this period. It also appointed a 'Committee of Advisors' to assist the Administrator.
As of March 2024, the bank had 28 branches, mostly located in the Mumbai region. Its overall assets decreased to Rs 1,175 crore from the year-ago period's Rs 1,330 crore, and the gross non-performing assets ratio increased to nearly 7.96 per cent.
RBI reconstitutes Committee of Advisors
Meanwhile, the RBI has also reconstituted the Committee of Advisors (CoA) to the Administrator (effective February 25, 2025). The CoA now consists of Ravindra Sapra, former General Manager, SBI; Ravindra Tukaram Chavan, former Deputy CGM, Saraswat Co-operative Bank; and Anand M Golas, a chartered accountant.
"The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank," the central bank said.
The restrictions came into force from the close of business on February 13 and would remain in force for a period of six months and are subject to review.
RBI had said that the directions 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.
Further, eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Also Read: New India Co-operative Bank update: Will RBI give some relief to depositors?