New India Co-operative Bank: The Reserve Bank had imposed restrictions on New India Co-operative Bank last week. But now there is a consideration on giving the facility of withdrawing money to the depositors.
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New Delhi. RBI is preparing to give a big discount to the customers of New India Co-operative Bank, one of the country’s renowned co-operative banks. The Reserve Bank had recently imposed a ban on this bank and also stopped the depositors from withdrawing their money. Now some relaxation is being considered in this decision, so that in case of an emergency, the customers can be given their money.
Sources related to the matter say that the Reserve Bank of India (RBI) is working on a scheme so that the depositors of the troubled New India Co-operative Bank can get the facility of special withdrawal for personal and medical emergencies. RBI, in collaboration with the administrator of the bank, is considering giving them the exemption to withdraw money by taking proof of emergency from the depositors.
How much money will be allowed to be withdrawn
Under RBI rules, if a bank collapses, its customers get insurance up to Rs 5 lakh on the amount deposited. It is believed that RBI can allow the customers of New India Co-operative Bank to withdraw money up to this limit. In this regard, they can be given the facility to withdraw up to Rs 5 lakh. Under RBI rules, depositors get the facility to withdraw up to Rs 5 lakh within 90 days after the bank collapses.
Why the ban was imposed on the bank
New India Co-operative Bank has been facing losses for the last two financial years. It reported a loss of Rs 22.78 crore in the 2024 financial year and a loss of Rs 30.75 crore in the 2023 financial year. As of March 31, 2024, the bank had deposits of Rs 2.43 billion and loans of Rs 1.17 billion. Last week, RBI barred the bank from disbursing new loans. Deposit withdrawals were suspended for six months and an administrator was appointed.
Will the bank be completely closed?
Sources have even speculated that it is not clear whether RBI will restart the bank after 6 months or not. Earlier, RBI had taken action against many co-operative banks, where its decisions were against the depositors. Currently, RBI has increased the deposit insurance coverage to 5 lakhs, which is being considered to be increased once again. More than 90 percent of the depositors of this co-operative are also fully covered under insurance.
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