RBI eases restrictions on New India Co-operative Bank; Deposit withdrawals up to Rs 25,000 now allowed
Reserve Bank of India on Monday announced its decision to relax the restrictions on New India Co-operative Bank Limited, Mumbai, allowing depositors to withdraw up to Rs 25,000 from their accounts. The decision, effective from February 27, 2025, follows a review of the bank’s liquidity position in consultation with the bank’s Administrator.
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This will enable over 50% of the bank’s total depositors to access their full balances. For the remaining depositors, withdrawals will be capped at Rs 25,000 or the balance available in their account, whichever is lower.
On February 13, 2025, the RBI had imposed All Inclusive Directions (AID) on the bank, halting any withdrawals from savings, current, and other accounts as a precautionary measure to protect depositors’ interests. Subsequently, on February 14, 2025, the central bank superseded the it's Board and appointed an Administrator along with a Committee of Advisors (CoA) to oversee the situation and ensure the bank’s stability.
The RBI was working on a plan to allow depositors of New India Co-operative Bank, which is facing significant financial challenges, to make special withdrawals for personal and medical emergencies, two sources familiar with the matter told Reuters.
Under current regulations, deposits of up to Rs 500,000 are insured in the event of a bank failure, with payments to be made within
