New India Co-operative Bank customers gather in panic after RBI imposes restrictions

The Reserve Bank of India (RBI) had imposed several restrictions on New India Co-operative Bank due to supervisory concerns. This comes after the close of the bank's business on Thursday, February 13, 2025, and the restrictions would continue for a six month period, subject to review. However, this resulted in panic, with several of the bank's customers seen rushing to and gathering around a branch.

"Considering the bank's present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor," the RBI wrote in its announcement. However, the bank is allowed to set off loans against deposits, but this is subject to certain conditions.

The bank can also incur expenditure on salaries of employees, rent, and electricity bills. The RBI also announced that the bank should not grant or renew any loans and advances, make any investment, and incur any liability, which includes acceptance of fresh deposits, without prior approval.