Mumbai, February 15, 2025 – The Reserve Bank of India (RBI) has taken stringent action against the crisis-hit New India Co-operative Bank, sacking its board and appointing an administrator following significant financial irregularities and governance failures. The central bank had imposed severe restrictions on the Mumbai-based bank, barring it from issuing new loans, accepting fresh deposits, and restricting withdrawals for depositors for the next six months.
In an order dated February 13, the RBI stated, “From the close of business on February 13, 2025, the bank shall not, without prior approval of RBI, grant or renew any loans, make any investment, incur liabilities, or dispose of any of its properties.” The bank, struggling with liquidity concerns, has also been directed to freeze withdrawals but is permitted to set off outstanding loans against deposits under specific conditions. Essential expenses such as employee salaries, rent, and utility bills will be allowed.
To oversee the bank’s operations, the RBI has appointed Shreekant, former chief general manager of the State Bank of India (SBI), as the administrator. He will be assisted by a committee of advisors comprising Ravindra Sapra, former general manager of SBI, and chartered accountant Abhijeet Deshmukh.
New India Co-operative Bank has been facing financial distress, reporting a loss of ₹23 crore in FY 2024. The bank’s loan book shrank from ₹1,330 crore to ₹1,175 crore, though deposits saw a slight increase to ₹2,436 crore.
This move follows a similar action against Gurugram-based Aviom India Housing Finance, whose board was superseded in January, leading to insolvency proceedings.
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