RBI Allows New India Co-operative Bank Depositors To Withdraw Up To Rs 25,000

The Reserve Bank of India (RBI) has permitted depositors of New India Co-operative Bank, Mumbai, to withdraw a maximum of Rs 25,000 from their accounts from February 27, 2025. The move comes after RBI reviewed the liquidity position of the bank, and is a partial easing of the curbs put in place last month. 

On February 13, 2025, RBI had placed the bank under the All-Inclusive Directions (AID), and had barred depositors from making withdrawals from their savings, current, or other accounts. RBI had also appointed an administrator, and later on February 25, 2025, a Committee of Advisors (CoA) to manage the bank. 

The latest withdrawal facility is expected to provide relief to majority of the bank’s customers. More than 50 per cent of the depositors will be able to withdraw their full balances, while others will be able to withdraw up to Rs 25,000. Withdrawals are allowed through bank branches and ATMs, but with a ‘per depositor’, and not ‘per account’ limit on withdrawals.  

How Things Unfolded 

New India Co-operative Bank was facing financial difficulties, following which RBI imposed its regulatory actions on the bank. Imposition of AID was a precautionary step to prevent further deterioration in the financial condition of the bank while simultaneously protecting the interests of the depositors. Banks do not have much scope under such a scenario. Even though these restrictions are temporary in nature, they bring significant problems to customers as it puts a limit on withdrawals. 

As part of the ongoing exercise of restructuring, the RBI also reconstituted the CoA on February 25, 2025. The new committee consists of Ravindra Sapra, former general manager of State Bank of India; Ravindra Tukaram Chavan, former deputy chief general manager of Saraswat Co-operative Bank and Anand M. Golas, a chartered accountant. Shreekanth, former chief general manager of SBI, who was appointed by RBI as the administrator of the bank after placing the bank under AID on February 13, 2023 will continue as the administrator. 

RBI’s Monitoring 

The RBI has promised to closely monitor the progress and will further intervene to protect customers’ interests. The central bank has reiterated that its interest lies in ensuring stability in the cooperative banking sector and will keep a watch on the financial health of the bank. 

Even though this easing of withdrawal provides relief in the short run, depositors are now looking forward to further announcements by RBI regarding potential restoration of banking services in entirety, merger, or other steps for a quick and permanent resolution. In the meantime, affected consumers can withdraw their sanctioned amounts from February 27 through bank offices or ATMs as per the RBI order.