New India Co-operative Bank Depositors Can Withdraw Up to Rs 25,000 Starting Thursday, Says RBI

Depositors of the troubled New India Co-operative Bank received a glimmer of hope today as the Reserve Bank of India (RBI) announced they can withdraw up to Rs 25,000 starting Thursday, February 27. This decision comes after weeks of uncertainty following severe restrictions placed on the Mumbai-based bank earlier this month.

The RBI revealed that this relaxation will let over 50% of the bank’s depositors access their full account balances. For others, the limit is capped at Rs 25,000 or their available balance—whichever is lower. Depositors can visit branches or use ATMs to withdraw the money, offering some relief after days of panic and long queues outside the bank’s 28 branches, mostly in Mumbai.

On February 13, the RBI had slammed the brakes on the bank’s operations due to serious financial concerns. It banned all withdrawals, stopped new loans, and barred the bank from accepting fresh deposits for six months. The move sparked chaos, with depositors rushing to branches, fearing they’d lose their savings. The central bank said these steps were needed to protect customers while it reviewed the bank’s shaky liquidity.

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“The Reserve Bank, after reviewing the bank’s liquidity position with the Administrator, has decided to allow this withdrawal,” the RBI stated. This follows the appointment of an Administrator and a Committee of Advisors on February 14 to stabilize the bank, which reported losses of Rs 22.78 crore in the fiscal year ending March 2024.

The bank’s troubles deepened when Mumbai police arrested its General Manager, Hitesh Mehta, on February 17 for allegedly siphoning off Rs 122 crore. Despite the grim situation, eligible depositors remain covered up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.

For now, the Rs 25,000 withdrawal limit is a lifeline for many. The RBI assures it’s closely monitoring the crisis and may adjust restrictions based on the bank’s progress. As depositors breathe a cautious sigh of relief, questions linger about the bank’s future—and their hard-earned money.