RBI restrictions on New India Co-op Bank: All your FAQs answered

The Reserve Bank of India RBI has imposed strict restrictions on New India Cooperative Bank in Mumbai citing supervisory concerns over its financial positionAs per the restrictions which are effective from the close of business on 13 February 2025 the bank is barred from carrying out key financial activities without prior approvalThis has raised several concerns among depositors and stakeholders Herersquos everything you need to know about the situation1 When will you get my money backThe RBI has not provided a specific timeline for when depositors can withdraw their funds in full However depositors are entitled to claim up to Rs 500000 under the Deposit Insurance and Credit Guarantee Corporation DICGC scheme2 Can you withdraw your savings currentlyNo depositors are not allowed to withdraw any amount from their savings or current accounts under the current restrictions However they may be able to set off loans against their deposits subject to certain conditions specified by the RBI3 When can you remove your deposits Will you get my money backThe restrictions will remain in place for six months after which the RBI will reassess the bankrsquos financial condition If the bankrsquos situation improves the restrictions may be eased Meanwhile insured deposits up to Rs 500000 can be claimed4 How can you withdraw your savings How can depositors claim their insured amountDepositors must submit their willingness to claim insurance to the bank After due verification the claim amount of up to Rs 500000 will be processed under the provisions of the DICGC Act 1961 Further details can be obtained from the DICGC website5 What happens to my lockerThe RBIs directive does not mention any restrictions on bank lockers However some depositors at the Santacruz East branch told middaycom that the bank manager informed them that customers currently have access to the lockers6 What happens to fixed deposits FDs in the bankFixed deposits will remain with the bank but cannot be withdrawn until the restrictions are lifted However depositors with FDs up to 500000 are eligible to claim insurance under DICGC7 Will the bank shut down permanentlyNo the bankrsquos licence has not been revoked It will continue to operate under restrictions and the RBI will review its financial condition in six months8 What should depositors do nextDepositors should stay updated on RBI announcements and regularly check the DICGC website for claimrelated details It may also be wise to explore alternative banking options for future financial security9 Where can you get more informationFor official updates depositors can visit the bankrsquos website or refer to the DICGC website wwwdicgcorgin for details on deposit insurance claims The RBIrsquos official website may also provide updates on further developments10 What restrictions has the RBI placed on New India Cooperative BankThe bank cannot grant or renew loans make investments borrow funds accept fresh deposits disburse payments or sell assets without RBI approval The bank can only incur essential expenses such as employee salaries and utility bills11 Why has the RBI imposed these restrictionsThe RBI has cited supervisory concerns arising from financial difficulties faced by the bank These measures have been taken to protect depositors interests and ensure the stability of the banking system12 How long will these restrictions lastThe RBIrsquos directive will remain in effect for six months from 13 February 2025 subject to review based on the bankrsquos financial health13 Is there any precedent for such restrictionsYes the RBI has previously imposed similar restrictions on banks facing financial distress such as Punjab and Maharashtra Cooperative Bank in 2019 In that case the RBI later facilitated its takeover by another financial institution14 Will salaries of bank employees be affectedNo the RBI has permitted the bank to incur essential expenses including salaries rent and utility billsWhile the RBIrsquos intervention aims to protect depositors the coming months will be crucial in determining the future of New India Cooperative Bank Customers should stay informed and explore alternative banking options where necessary