The Reserve Bank of India (RBI) on Friday barred the bank from granting or renewing loans, accepting fresh deposits, make investment, disbursing any payment for its liabilities or selling any of its properties due to supervisory concerns

The concerns emanated from the recent material developments in the bank, and to protect the interest of depositors of the bank, the regulator said in a statement

A crowd of people were seen outside Mumbai-based New India Co-operative Bank as customers wanted to withdraw their money after the RBI imposition

Customers outside the bank`s Kandivali west branch looked stressed and confused about when they will recieve their money back

The Reserve Bank`s Directions to New India Co-operative Bank, Mumbai for close of all business came into force on Thursday and would stay for a period of six months

Further, eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to Rs 5 lakh within 90 days from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as per official bank statement

RBI said that from the close of business on February 13, 2025, the bank shall not, without prior approval, grant or renew any loans and advances, make any investment, and incur any liability, including acceptance of fresh deposits

"Considering the bank`s present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor," the RBI added

"These directions are 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 central bank said

The RBI, however, gave relaxation to New India Co-operative Bank Limited in respect of certain essential items such as salaries of employees, rent, electricity bills, etc

Customers visit New India Co-oprative Bank`s Andhri East branch for collecting their things from their locker after RBI notice - Directions under section 35A read with section 56 of the Banking Regulation Act, 1949

As per RBI, the issuance of the directives doesn`t equal to the cancelling of the Bank`s banking licence

Until its financial situation improves, the bank will carry on with its banking operations, subject to the limitations outlined in the Directions, the central bank said

The RBI currently will keeps an eye on the bank`s situation and will take appropriate measures, such as modifying these directives, if needed, contingent on the situation and in the depositors` best interests

For more information, depositors can get in touch with bank representatives. Information may also be accessed on the DICGC website: www.dicgc.org.in