Crowds Gather Outside New India Co-operative Bank Following RBI Restrictions
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Synopsis
In response to the Reserve Bank of India's (RBI) restrictions on New India Co-operative Bank in Bandra, Mumbai, customers are facing difficulties accessing their deposits. Long queues formed outside the bank as account holders attempt to withdraw their funds amidst the uncertainty.
Key Takeaways
- RBI restrictions lead to customer panic.
- Long queues outside New India Co-operative Bank.
- Customers unable to access their deposits.
- Limited withdrawals allowed under specific conditions.
- Deposit insurance claims available for eligible depositors.
Mumbai, Feb 14 (NationPress) The Reserve Bank of India’s (RBI) restrictions imposed on New India Co-operative Bank, situated in Bandra, Mumbai, have led to widespread panic among clients, who now find themselves unable to access their savings. Customers are forming long lines outside the bank in an effort to withdraw their funds.
On Friday morning, account holders received notifications regarding the RBI’s decision. The bank has been prohibited from accepting new deposits or permitting withdrawals, resulting in distress among its clients.
Ajay More, a loyal customer for over two decades, voiced his frustration to IANS: “I have been banking here for 22 years. My wife and I have all our savings in this bank. Without any prior notice, we are now unable to access our money. We’ve been told to wait for 90 days -- but how are we supposed to manage until then?”
Many customers criticized the RBI’s sudden action, asserting that they should have received advance warnings.
Arbaaz Khan, another customer, stated to IANS, “We rely on this bank for daily expenses. Had we been informed earlier, we could have secured our funds. This sudden freeze is unfair.”
While the RBI has permitted limited withdrawals under specific conditions, clients argue that the allowed amounts are inadequate.
Vidya, a depositor with fixed deposits at the bank, shared with IANS, “Now we’re told we can withdraw only under certain rules. If we had prior notice, we could have planned our finances better.”
The RBI's restrictions stem from concerns regarding supervision and liquidity issues. The directive, which took effect on Thursday, prohibits the bank from allowing withdrawals but allows for loan adjustments against deposits. Essential expenses such as employee salaries, rent, and utility bills can still be addressed.
“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 but is allowed to set off loans against deposits subject to the conditions stated in the above RBI Directions. The bank may incur expenditure in respect of certain essential items such as salaries of employees, rent, electricity bills, etc,” the RBI stated on Thursday.
“The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5,00,000 in the same capacity and in the same right, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), as applicable under the provisions of the DICGC Act, 1961, based on submission of willingness by the depositors concerned and after due verification,” the statement further elaborated.
