RBI Allows Withdrawal for New India Cooperative Bank Depositors

26 Feb 2025 CW Team

In a partial relief to depositors of the fraud-hit New India Cooperative Bank, the Reserve Bank of India (RBI) has permitted withdrawals of up to Rs 25,000 starting February 27. This relaxation will enable more than 50% of the bank’s depositors to withdraw their entire balances, while the remaining depositors can access up to Rs 25,000 from their accounts. The withdrawals can be made through the bank’s branches and ATMs, subject to an upper limit of Rs 25,000 per depositor or their available account balance, whichever is lower.

Additionally, the RBI has reconstituted the Committee of Advisors (CoA) to the Administrator, effective February 25. The newly appointed CoA members include Ravindra Sapra, former General Manager of State Bank of India; Ravindra Tukaram Chavan, former Deputy CGM of Saraswat Co-operative Bank Ltd; and Anand M. Golas, Chartered Accountant. However, there is no change in the Administrator, with Shreekant, former Chief General Manager of State Bank of India, continuing in the role.

The RBI stated that it is closely monitoring the situation and will take necessary steps in the interest of depositors. On February 13, the central bank imposed strict restrictions on New India Cooperative Bank, suspending deposit withdrawals and halting fresh loan disbursements. The following day, the bank’s board was superseded, and an administrator was appointed. Meanwhile, the Deposit Insurance and Credit Guarantee Corporation (DICGC) has begun processing claim settlements, expected to be completed by May 14, 2025.

In the wake of RBI’s actions, Mumbai Police registered a case against the bank’s General Manager, Head of Accounts, and their associates for allegedly embezzling ?122 crore. Subsequently, the Economic Offences Wing (EOW) also arrested the former CEO of the bank.

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