The Reserve Bank of India (RBI) has granted depositors of New India Cooperative Bank the ability to withdraw up to ₹25,000, effective February 27, 2025. This decision comes over a week after the central bank intervened to dissolve the bank’s board due to supervisory concerns.
Cash Withdrawal Relief
Following a review of the bank’s liquidity position in consultation with the administrator, the RBI decided to provide partial withdrawal relief. With this relaxation, more than 50% of the total depositors will be able to withdraw their entire balances, while the remaining depositors can withdraw up to ₹25,000 from their accounts.
“Depositors may use both branch and ATM channels to access their funds, subject to a maximum withdrawal of ₹25,000 per depositor or their available balance, whichever is lower,” the RBI stated.
Committee Reconstitution and Continued Monitoring
The central bank has also reconstituted the committee of advisors to the bank’s administrator, effective February 25. The revised committee includes:
- Ravindra Sapra, former General Manager, State Bank of India
- Ravindra Tukaram Chavan, former Deputy Chief General Manager, Saraswat Co-operative Bank Ltd
- Anand M Golas, Chartered Accountant
The RBI assured that it is closely monitoring developments and will take necessary measures in the interest of depositors.
Background and Financial Standing
On February 13, the RBI imposed restrictions on New India Cooperative Bank, barring it from allowing withdrawals from savings, current, or other deposit accounts. The central bank directed affected customers to consult bank officials and the Deposit Insurance and Credit Guarantee Corporation (DICGC) to claim insurance payments for deposits up to ₹5 lakh. However, the regulator emphasized that these restrictions should not be seen as a cancellation of the bank’s license.
According to the bank’s annual report, as of March 31, 2024, total deposits stood at ₹2,436.4 crore, a slight increase from ₹2,405.9 crore the previous year. Fixed deposits accounted for 67.2% of the total, while 27.9% were savings deposits and the remainder in current accounts. The bank’s loan portfolio shrank by 11.7% year-on-year to ₹1,174 crore. Meanwhile, its capital adequacy ratio stood at 9.1% in FY24, below the regulatory requirement of 10%—a shortfall it has experienced for two consecutive fiscal years.
