RBI Action on New India Co-Operative Bank: The Reserve Bank of India (RBI) has imposed strict restrictions on New India Co-operative Bank Limited, Mumbai, barring it from issuing new loans, accepting fresh deposits, or allowing withdrawals for the next six months.
RBI Freezes Operations of New India Co-operative Bank: No Loans, No Withdrawals for 6 Months
Why Did RBI Take This Step?
RBI cited concerns over the bank’s financial health and liquidity, stating that the move was taken to protect depositors’ interests.
In its official notice, RBI stated: “It is hereby notified for public information that the Reserve Bank of India (RBI) has issued certain directions to New India Co-operative Bank Limited, Mumbai. Effective from the close of business on February 13, 2025, the bank shall not, without prior written approval from RBI, issue or renew any loans and advances, make investments, incur liabilities, borrow funds, accept fresh deposits, disburse payments, sell or transfer assets, or engage in any financial activities.”
Financial Struggles of the Bank
New India Co-operative Bank has been facing significant financial losses in recent years.
In FY 2023-24, the bank recorded a loss of ₹227.8 million.
In FY 2022-23, it reported an even higher loss of ₹307.5 million.
The bank’s loan book shrank to ₹11.75 billion as of March 2024, down from ₹13.30 billion in the previous year.
Deposits, however, saw a slight increase, rising to ₹24.36 billion from ₹24.06 billion.
Has the Bank License Been Cancelled?
No, RBI clarified that the bank’s license has not been revoked. These restrictions are temporary, and RBI will continue monitoring its financial condition before deciding on further action.
RBI Past Actions on Co-operative Banks
This is not the first time RBI has taken strict action against a co-operative bank. In 2019, Punjab and Maharashtra Co-operative (PMC) Bank faced similar restrictions after financial irregularities were discovered. Later, Centrum Financial Services took over PMC Bank under RBI’s supervision.
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