New India Co-operative Bank depositors can withdraw up to ₹25,000 from February 27 – 5 things to know

The Reserve Bank of India (RBI) has permitted depositors of New India Co-operative Bank to withdraw up to ₹25,000 from Thursday, February 27 onwards.

Each depositor can withdraw up to ₹25,000, as per the directive issued by RBI on Monday, February 24.

The new directive will enable more than 50 per cent of New India Co-operative Bank depositors to withdraw their entire money.

What did RBI directive say?

“The Reserve Bank, after reviewing the bank’s liquidity position in consultation with the Administrator, has decided to allow a deposit withdrawal of upto ₹25,000 (Rupees Twenty Five Thousand only) per depositor, with effect from February 27, 2025," the central bank said.

"With above relaxation more than 50 per cent of the total depositors will be able to withdraw their entire balances and the remaining depositors can draw upto ₹25,000 from their deposit accounts,” it added.

How to withdraw money?

The depositors will be able to withdraw money from ATMs or bank branches. However, the total amount that can be withdrawn will be ₹25,000 per depositor or the balance available in their account, whichever is lower.

RBI's action against New India Cooperative Bank

On February 14, the RBI took over the board of New India Co-operative Bank for 12 months, a day after imposing several restrictions over poor governance issues and irregularities in lending activities. The RBI had also barred account holders and depositors from withdrawing money from the bank for six months.

Following RBI's action, customers of the Maharashtra-based bank panicked and went to its branches, hoping to access their funds. The RBI appointed Shreekant, a former Chief General Manager of the State Bank of India (SBI), as the administrator to manage the affairs of New India Co-operative Bank and a 'Committee of Advisors' to assist him.

₹122 crore fraud allegation against former GM

On February 15, the bank's former general manager and head of accounts, Hitesh Pravinchand Mehta, was arrested for allegedly siphoning ₹122 crore from the lender.

Mehta was accused of withdrawing large amounts of money by using his position in the bank. He was under sections 316 (5) and 61 (2) of the BNS (Banking and Non-banking Services).

The scam allegedly began after COVID-19, with ₹112 crores misappropriated from the Prabhadevi branch and ₹10 crores from Goregaon. The scam occurred between 2020 and 2025, as Mint reported earlier.

About New India Cooperative Bank

The New India Cooperative Bank was established in 1968 as the Bombay Labour Cooperative Bank. It was founded by former minister George Fernandes, and Ranjit Bhanu,  a “noted criminal lawyer, trade unionist and a member of legislative assembly," according to bank's website.

As on March 2024, the bank held deposits of ₹2,436.4, a marginal increase from ₹2,405.9 crore a year earlier, according to its annual report. The New Cooperative Bank had 28 branches until March 2024. Most of the bank branches are located in Mumbai. There are two branches in Surat, Gujarat, and one in Pune.