The RBI has superseded the board of New India Cooperative Bank. The bank is suffering from financial and management issues and recently RBI has banned the Bank from undertaking banking operations. Due to this, a chaos has been created and public is rushing to the bank to withdraw their money. Public is worried what will happen to their money as RBI has imposed restrictions on Bank. Police had to be called to handle the crowd at Bank branches.
The RBI has appointed Shreekant, a former chief general manager of the State Bank of India (SBI), as the administrator to manage the bank’s affairs. Additionally, a committee of advisors has been formed to assist him, the RBI said.
The RBI directed the bank not to grant or renew any loans and advances, make any investment, incur any liability including borrowing funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations without prior approval of RBI in writing.
New India Cooperative Bank has a network of 30 branches and a deposit base of Rs 2,436 crore as of March 2024. The bank had posted losses of Rs 22.78 crore in 2023-24 and Rs 30.74 crore in 2022-23.
This is the first major action against a cooperative bank in Maharashtra after the collapse of the Punjab and Maharashtra Co-operative (PMC) Bank due to large-scale fraudulent loans.
The Mumbai police on Saturday registered a Rs 122 crore fraud case against the general manager and head of accounts of city-based New India Cooperative Bank.
The case against Hitesh Mehta, the general manager and head of accounts of the bank, was lodged on the complaint of Devarshi Shishir Kumar Ghosh, 48, the bank’s chief executive officer, the police said.