The Reserve Bank of India (RBI) has placed severe restrictions on Mumbai-based New India Co-operative Bank Limited due to concerns over its financial health and liquidity. The central bank has barred the bank from issuing new loans, accepting fresh deposits, or allowing withdrawals for the next six months.
In an official notice, the RBI stated that, effective February 13, 2025, the bank cannot grant or renew loans, make investments, borrow funds, accept deposits, or disburse payments without prior approval from the RBI. The move comes after what the central bank described as “recent material developments” at the bank, though specific details were not disclosed. The RBI emphasized that these steps are necessary to protect depositors’ interests.
New India Co-operative Bank has been struggling with financial losses in recent years. In the financial year ending March 2024, the bank recorded a loss of ₹227.8 million, following a loss of ₹307.5 million in the previous year. Its loan book shrank to ₹11.75 billion as of March 31, 2024, down from ₹13.30 billion a year earlier. However, deposits showed a slight increase, rising to ₹24.36 billion from ₹24.06 billion.
Despite these restrictions, the RBI clarified that the bank’s license has not been revoked. The central bank will continue monitoring the situation and take further action as needed.
This is not the first time the RBI has taken strict action against a co-operative bank. In 2019, Punjab and Maharashtra Co-operative Bank (PMC Bank) faced similar restrictions after financial irregularities were uncovered. The bank was later taken over by Centrum Financial Services under RBI supervision.With these latest measures, depositors of New India Co-operative Bank now face uncertainty, as they await further updates on the bank’s financial stability.
