RBI Provides Major Relief to New India Cooperative Bank Customers with Increased Withdrawal Limits

RBI Provides Relief to Customers of New India Co-operative Bank

The Reserve Bank of India (RBI) has recently announced that customers of the New India Co-operative Bank will now be allowed to withdraw up to ₹25,000. This decision brings much-needed relief to account holders, who have faced difficulties following the imposition of severe restrictions on the bank. Effective February 27, 2025, depositors can access their funds, enabling them to regain some control over their finances.

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Withdrawal Permissions for New India Co-operative Bank Customers

This relief comes after a critical review of the bank’s liquidity situation by the RBI. The central bank had previously imposed stringent restrictions, including a complete withdrawal ban, due to concerns about the bank’s financial stability.

Details on Withdrawal Limits

Account holders with a total balance of ₹25,000 or less can withdraw their entire amount.
Account holders with a balance exceeding ₹25,000 can withdraw a maximum of ₹25,000.

Accessing Funds via ATM

In addition to cash withdrawals from the branch, customers can now use ATMs to access their funds. The RBI has authorized the New India Co-operative Bank and other banks’ ATMs for this purpose. This flexibility is crucial for customers facing urgent financial needs.

Management Restructuring and Oversight

Following the imposition of restrictions, the RBI dissolved the bank’s board and appointed an Administrator along with a Committee of Advisors (CoA) to ensure proper management and oversight. Recently, this committee has been restructured, incorporating former senior officials from the State Bank of India (SBI) and Saraswat Co-operative Bank. The RBI has assured that it will continue to monitor the situation closely to protect depositors’ interests.

Legal Actions and Investigations

The situation escalated when the Economic Offences Wing (EOW) arrested the bank’s CEO, Hitesh Mehta, and developer Dharmesh Paun in connection with alleged financial misconduct. Following an inspection by the RBI, evidence of misappropriation of funds was found. As a result, the RBI imposed a six-month ban on the bank, leading to long queues of anxious depositors outside its branches in Mumbai.

Many account holders are currently facing difficulties, with some having gold deposits and others seeing their savings frozen. This has heightened the need for regulatory scrutiny and quicker resolutions for account holders.