Regardless of the total amount deposited, eligible account holders of New India Co-operative Bank, Mumbai, will receive a maximum sum of Rs 5 lakh. However, this will only be the case till the Reserve Bank of India (RBI) allows the full re-payment.
RBI directed the New India Co-operative Bank to cease all banking business for now. The RBI has issued certain Directions to New India Co-operative Bank Limited, Mumbai. RBI directed that the bank will not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of its properties or assets except as notified in the RBI Direction dated February 13, 2025.
“These directions are necessitated due to supervisory concerns emanating from the recent material developments in the bank, and to protect the interest of depositors of the bank,” said the RBI.
New India Co-operative Bank: Sum Insured
“The eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) 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 depositors may contact the bank officials for further information,” read the RBI circular.
The DICGC guarantees up to Rs 5 lakh per depositor, per bank, covering both principal and interest. This limit applies uniformly across all types of deposits, including savings accounts, fixed deposits, current accounts, and recurring deposits. If any bank becomes bankrupt, depositors are insured up to Rs 5 lakh, providing a safeguard for their savings, regardless of the total deposit amount held in the bank. However, this safeguard is still a concern for individuals with high net worth or even businesses with substantial deposits.
RBI, in its statement, said that the directions will remain in force for a period of 6 months from the close of business (February 13, 2025) and will be reviewed later.
