‘We Have To Pay EMIs’: Bank Customers Panic As RBI Imposes Restrictions
A large number of customers were seen lined up outside the New India Co-operative Bank‘s Vijayanagar branch in Andheri, Mumbai, after the Reserve Bank of India’s (RBI) imposition of many restrictions on the bank. Concerned depositors have gathered to withdraw their funds after the RBI announced that the bank would face significant limitations on its operations due to ongoing supervisory concerns.
RBI’s Restrictions on Bank Operations
The RBI’s directions to the New India Co-operative Bank came into effect at the close of business on Thursday, February 13, 2025, and will remain in force for six months. These restrictions include a prohibition on withdrawals from savings, current, and other accounts. According to the central bank, this action was necessary due to the bank’s current liquidity position, and it aims to protect the interests of the bank’s depositors.
The RBI has also prohibited the bank from granting or renewing loans, making new investments, and incurring any further liabilities, including accepting fresh deposits, without prior approval. The bank, however, is still allowed to set off loans against deposits under certain conditions specified by the RBI.
Impact on Customers and Operations
The restrictions have led to significant distress among customers, especially senior citizens, who were seen waiting in long queues outside the branch. Many depositors expressed confusion over when they would be able to access their funds, and some reported that the bank’s customer support services, as well as its mobile app, were non-functional, adding to the frustration. To manage the situation, bank officials distributed coupons to customers waiting in line, allowing them access to their lockers.
Bank’s Ongoing Expenses and Future Actions
While the RBI has imposed strict limits on the bank’s operations, it has allowed the bank to make necessary expenditures related to essential items such as employee salaries, rent, and utility bills. Despite the challenges, the bank is expected to operate under these limitations until further notice, with the RBI monitoring the situation over the coming months.
Deposit Insurance
In light of these developments, the RBI has assured depositors that eligible individuals can claim deposit insurance for amounts up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC). This measure aims to provide a safety net for those whose funds are affected by the bank’s current restrictions.
As the situation continues to unfold, both the bank and its customers will be waiting for further updates on the status of the bank’s operations and the potential lifting of these restrictions.
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