Depositors demand concrete plan for revival or merger of scam-hit New India Co-operative Bank – Banking & Finance News #IndiaFinance

Depositors of the New India Co-operative Bank (NICB), which has been reeling from a massive Rs 122 crore embezzlement case, recently met with RBI-appointed advisors and senior officials in Mumbai to demand urgent measures for the bank’s revival or merger and better protection for depositors’ interests. This meeting, held at the bank’s corporate office in Prabhadevi, is part of ongoing efforts by the NICB Depositors’ Foundation to ensure financial security for thousands of account holders who have faced severe hardship since the Reserve Bank of India (RBI) imposed restrictions on the bank on February 13, 2025.

Led by Foundation President, TN Raghunatha, the delegation met with RBI-appointed advisors Ravindra Chavan and Ravindra Sapra, who offered a cautiously optimistic outlook on the bank’s future. According to Raghunatha, while specific details could not be disclosed, the advisors confirmed that multiple options, including the potential for a merger, were being actively explored.

“We are hopeful about the prospects of the bank’s revival,” said Raghunatha. “The advisors assured us that our concerns, along with our written representation, would be forwarded to the RBI, along with their own recommendations.”

In addition to the revival or merger discussions, the foundation also raised concerns regarding the withdrawal limits. Currently set at Rs 25,000 per account holder, the foundation is demanding an increase to Rs 1.5 lakh, citing severe financial strain on depositors, particularly senior citizens and cooperative housing societies who have been significantly impacted by the restrictions.

The delegation also met with three Assistant General Managers from the RBI’s Supervision Department at their Maker Chambers office in Cuffe Parade. “The RBI officials were receptive and assured us that our concerns would be raised with higher authorities,” said Rajani Pitale, Vice President of the NICB Depositors’ Foundation. “They recognized the need for an official update on the bank’s current status.”

Meanwhile, Mumbai Police have made eight arrests in connection with the embezzlement case, which has further deepened the crisis for the bank and its account holders.

As the situation continues to unfold, depositors remain anxious about the future of their savings. The NICB Depositors’ Foundation is calling for urgent action from the RBI to restore confidence in the bank and protect the interests of its account holders.