RBI Plans Emergency Withdrawal Limit for New India Co-op Depositors
Why in the news
RBI is reportedly designing a limited relief for depositors of the troubled New India Co-operative Bank, allowing money to be taken out in personal or medical emergencies.
Key facts
- Depositors must prove an emergency to qualify.
- Maximum withdrawal: ₹5 lakh, equal to the deposit insurance cover.
- The plan follows curbs imposed the previous week: no deposit withdrawals or new loans for six months, citing liquidity concerns.
- It is unclear whether the bank will resume operations afterwards.
Regulatory context
- Deposits up to ₹5 lakh are insured; payout after a bank failure is expected within 90 days.
- RBI has appointed an administrator to review the bank’s functioning and financial health.
- RBI had not yet commented publicly.
Concerns
- No clear revival plan exists; depositors may need to track RBI updates and consider other banking arrangements.
Exam angle
- Deposit insurance limit: ₹5 lakh; payout timeline: 90 days.