Long queues outside New India Co-operative Bank after RBI imposes restrictions

Mumbai: The Reserve Bank of India’s (RBI) restrictions on New India Co-operative Bank, located in Bandra, Mumbai, have triggered panic among customers, who are now unable to access their deposits. People are queuing up outside the bank to withdraw their deposits.

On Friday morning, customers received messages informing them of the RBI’s decision. The bank has been barred from accepting new deposits or allowing withdrawals, leaving account holders in distress.

Ajay More, a long-time customer, expressed his frustration to IANS: “I have been banking here for 22 years. My wife and I have all our savings in this bank. Without any prior notice, we are now unable to access our money. We’ve been told to wait for 90 days — but how are we supposed to manage until then?”

Many customers criticised the RBI’s abrupt move, saying they should have been warned in advance.

Arbaaz Khan, another customer, told IANS, “We rely on this bank for daily expenses. Had we been informed earlier, we could have secured our funds. This sudden freeze is unfair.”

Although the RBI has allowed limited withdrawals under specific conditions, customers argue that the amount permitted is insufficient.

Vidya, a depositor with fixed deposits in the bank, told IANS, “Now we’re told we can withdraw only under certain rules. If we had prior notice, we could have planned our finances better.”

The RBI imposed these restrictions due to supervisory concerns and liquidity issues. The directive, effective from Thursday, bars the bank from allowing withdrawals but permits loan adjustments against deposits. Essential expenses like employee salaries, rent, and electricity bills can still be covered.

“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 but is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions. The bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, etc,” the RBI said in a statement on Thursday.

“The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5,00,000 in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification,” the statement said further.

–IANS