New India Co-operative Bank is facing severe restrictions after the Reserve Bank of India (RBI) imposed a business halt due to supervisory concerns. The RBI directive, effective from February 13, 2025, prevents the bank from granting loans, accepting fresh deposits, or allowing withdrawals.

The move has left many depositors anxious, leading to crowds gathering outside the bank’s branches. As per Deposit Insurance and Credit Guarantee Corporation (DICGC) norms, eligible depositors can claim up to ₹5 lakh in insurance. Depositors have been urged to submit their claims for processing.

At the end of March 2024, the co-operative bank held ₹2,436 crore in deposits. The RBI’s intervention is aimed at safeguarding depositors’ interests while closely monitoring the bank’s financial situation. These restrictions will remain for six months, during which the RBI may modify the directives if needed.

This development raises concerns about the stability of co-operative banks in India, urging depositors to remain cautious. The RBI continues to supervise the situation, ensuring that financial security remains a priority.

The RBI will continue to evaluate the bank’s condition and may change these directions to protect depositors’ interests. The restrictions will stay in effect for six months, beginning on February 13, 2025.

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