The Reserve Financial institution of India (RBI) has barred Mumbai-based New India Co-operative Financial institution from issuing new loans and suspended deposit withdrawals for six months. The central financial institution cited supervisory issues and the lender’s liquidity place points over the unprecedented transfer.
The RBI transfer prevents depositors from withdrawing funds because the financial institution faces liquidity points. Quickly after the announcement, anxious clients have been seen queuing exterior numerous branches of New India Co-operative Financial institution.
The RBI introduced that efficient from the shut of enterprise on February 13, 2025, New India Co-operative Financial institution is barred from granting or renewing any loans or advances. It additionally can’t make any new investments or settle for contemporary deposits. Additionally it is not allowed to disburse any funds. The financial institution will not be allowed to eliminate any of its properties or make any investments or borrow funds.
The instructions have been vital as a consequence of issues arising from “current materials developments” on the financial institution, and to guard the curiosity of depositors, the RBI stated. Nonetheless, it didn’t elaborate on the specifics of those issues.
The central financial institution added that eligible depositors are entitled to deposit insurance coverage claims as much as Rs 5 lakh, as per the deposit insurance coverage scheme. Depositors have been requested to submit their claims with the financial institution. On the finish of March 2024, New India Co-op Financial institution had deposits value Rs 2,436 crore and advances value Rs 1,175 crore.
It reported a lack of Rs 22.78 crore for FY24 and Rs 42.11 crore in FY23.
In April 2024, in an analogous transfer, the RBI had restricted Kotak Mahindra Financial institution from on-boarding new clients by means of its on-line and cell banking channels and from issuing contemporary bank cards. Nonetheless, on Wednesday, the RBI had lifted the curbs on Kotak Mahindra Financial institution following passable compliance with regulatory necessities.
