RBI allows withdrawal of up to ₹25,000 per depositor of New India Co-operative Bank from February 27

Days after imposing several restrictions on New India Co-operative Bank, the RBI on Monday (February 24, 2025) relaxed the conditions and permitted customers to withdraw up to ₹25,000 from their deposit accounts with effect from February 27.

On February 13, the Reserve Bank had imposed All Inclusive Directions (AID) on the Mumbai-based cooperative bank, which included a ban on deposit withdrawals, amid supervisory concerns.

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Later, the RBI superseded the Board of Directors of New India Cooperative Bank for a period of 12 months. It also appointed Shreekant, former Chief General Manager of State Bank of India (SBI), as Administrator to manage the affairs of the bank during this period.

It also appointed a 'Committee of Advisors' to assist the Administrator.

In a statement on Monday, the Reserve Bank said that after reviewing the bank's liquidity position in consultation with the Administrator, it has "decided to allow a deposit withdrawal of up to ₹25,000 per depositor, with effect from February 27, 2025".

With the relaxation, more than 50% of the total depositors will be able to withdraw their entire balances and the remaining depositors can draw up to ₹25,000 from their deposit accounts.

"The depositors may use the branch as well as ATM channel of the bank for this withdrawal, however, aggregate amount that can be withdrawn will be ₹25,000 per depositor or the balance available in their account whichever is lower," RBI said.

The bank has 28 branches, mostly located in the Mumbai region.

Meanwhile, the RBI has also reconstituted the Committee of Advisors (CoA) to the Administrator (effective February 25, 2025).

The CoA now consists of Ravindra Sapra, former General Manager, SBI; Ravindra Tukaram Chavan, former Deputy CGM, Saraswat Co-operative Bank; and Anand M Golas, a chartered accountant.

"The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank," the central bank said.

The restrictions came into force from the close of business on February 13 and would remain in force for a period of six months and are subject to review.

RBI had said that the directions were necessitated due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interest of depositors of the bank.

Further, eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).