Mumbai: Long queues formed outside the New India Co-operative Bank in Mumbai as anxious customers rushed to withdraw their money following the Reserve Bank of India’s (RBI) sudden restrictions on withdrawals. The RBI’s directives, issued on Thursday due to supervisory concerns, have left depositors worried, with visuals of distressed customers surfacing online.
Many of those gathered outside the bank were senior citizens, clutching documents and seeking clarity on their savings. Bank officials reportedly distributed coupons, allowing customers to access their lockers, but the restriction on cash withdrawals has caused widespread panic.
Seema Waghmare, one of the bank’s customers, expressed frustration while speaking to ANI, saying, "We deposited money just yesterday, but no one warned us about this. Now, they say we’ll get our money in three months, but we have EMIs and bills to pay. How are we supposed to manage?"
Details On RBI's Directives
The RBI’s restrictions took effect from the close of business on Thursday and will remain in force for six months, subject to review. "Given the bank's current liquidity position, it has been directed not to allow withdrawals from savings or current accounts," the RBI stated.
However, the bank has been permitted to offset loans against deposits under specific conditions outlined by the RBI. It may also use funds for essential expenses such as employee salaries, rent, and electricity bills.
Starting February 13, 2025, the bank is barred from granting or renewing loans, making investments, or accepting fresh deposits without prior RBI approval. These measures have been imposed to safeguard depositors' interests in light of concerning financial developments at the bank, according to the central bank.
To provide some relief, eligible depositors will receive insurance claims of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Despite these assurances, uncertainty looms large over customers who now face financial stress and uncertainty about accessing their hard-earned savings.
