The Reserve Bank of India (RBI) has taken strict action against New India Co-operative Bank, imposing restrictions on its financial operations. As per the directive, the bank is now prohibited from granting new loans or accepting fresh deposits.
Restrictions Imposed by RBI
Under this regulatory action, New India Co-operative Bank is barred from:
- Issuing any new loans
- Accepting any form of deposits
- Making fresh investments
- Paying off existing liabilities
Additionally, the withdrawal of funds by depositors has been restricted, potentially causing inconvenience to account holders.
Impact on Depositors
In light of the restrictions, depositors will now be eligible for insurance coverage of up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme. This ensures that even if the bank faces financial trouble, individual depositors will be compensated up to ₹5 lakh.
Reason for RBI’s Action
While the RBI has not provided detailed reasons for this strict action, the restrictions will remain in place until the financial condition of the bank improves.
The decision reflects RBI’s ongoing efforts to safeguard the interests of depositors and ensure the stability of the banking sector.
