RBI Imposes Ban on New India Cooperative Bank, Customers Unable to Withdraw Money

The Reserve Bank of India (RBI) has imposed restrictions on New India Cooperative Bank, preventing customers from withdrawing their deposits. The announcement triggered panic among account holders, leading to chaos outside the bank’s Vijayanagar branch in Andheri, Mumbai.

Why Did RBI Ban Withdrawals from New India Cooperative Bank?

The bank’s liquidity position raised concerns, prompting RBI to restrict all withdrawals for six months starting February 13, 2025.
The bank cannot issue loans or allow customers to access their savings or salary deposits.
RBI’s move aims to prevent financial instability and protect depositors’ money.

What Happens to Depositors’ Money?

As of March 2024, the bank had ₹2,436 crore in deposits.
Under the Deposit Insurance Scheme, account holders can claim up to ₹5 lakh in insured deposits.
Customers have been advised to file their claims with the bank to secure their insured amount.

Chaos Outside the Bank, Officials Distribute Coupons

Large crowds gathered outside the bank after hearing about the withdrawal ban.
Officials distributed coupons to manage the crowd and allow customers to access their lockers.
Many individuals, including those who recently received salaries, were unable to withdraw their money.

Why Did RBI Take Action Against the Bank?

The bank’s weak liquidity and financial instability raised concerns about potential failure.
To protect depositors' interests, RBI has temporarily restricted withdrawals and lending.
While deposits can still be made, customers cannot access their money until further notice.
The ban will remain in effect for six months, and RBI will review the situation before deciding on further action.