RBI said that in view of the current cash position of the bank, it has been directed not to allow withdrawal of any amount from the depositor’s savings bank or current accounts or any other account.
The Reserve Bank of India (RBI) on Friday dissolved the board of Mumbai-based New-India Cooperative Bank for a period of 12 months. Along with this, former Chief General Manager of State Bank of India (SBI) Srikant has been appointed as the administrator to manage the affairs of the bank. Additionally, the RBI has appointed a committee of advisors to assist the administrator in the discharge of his duties, which includes former SBI General Managers Ravindra Sapra and Abhijit Deshmukh.
What did RBI say
In a statement issued by RBI, it was said – In exercise of the powers conferred under Section 36 AAA read with Section 56 of the Banking Regulation Act, 1949 (as applicable to cooperative societies), the Reserve Bank has dissolved the Board of Directors of New-India Cooperative Bank Limited, Mumbai for a period of 12 months.
RBI has imposed restrictions
RBI imposed several restrictions on New India Co-operative Bank, including withdrawal of funds by depositors. RBI said that in view of the current cash position of the bank, it has been directed not to allow withdrawal of any amount from the depositor’s savings bank or current accounts or any other account. The bank can incur expenditure in respect of certain essential items like salary, rent and electricity bills of employees. According to RBI, the bank cannot grant or renew loans without prior approval. Apart from this, it cannot make new investments or accept new deposits. It assured depositors that eligible can claim up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Financial position of the bank
The bank reported a net loss of Rs 22.77 crore in FY24. However, the loss narrowed to Rs 30.74 crore in FY23. The bank’s advances declined 11.66 per cent year-on-year to Rs 1,174.84 crore at the end of March 2024 from Rs 1,330 crore in March 2023. Its deposits grew 1.26 per cent to Rs 2,436.37 crore as of March 2024 from Rs 2,405.86 crore as of March 31, 2023. As of the end of March 2024, savings deposits were 27.95 per cent of total deposits, current deposits 4.23 per cent and term deposits 67.82 per cent.
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