A crowd has gathered outside the Mumbai-based New India Co-operative Bank as customers want to withdraw their money. The Reserve Bank has imposed restrictions on deposits and withdrawals made in and from the bank due to non-compliance with regulations, effective from Thursday, January 13. The co-operative bank is also not allowed to issue new loans. Panicked a/c holders queue up in front of bank branch Account holders gathered outside the Vijay Nagar branch in Andheri, Mumbai, are confused about when they will get their money. Some people have said that the bank is not answering their questions, and even its customer support services and app were not working. RBI's action stems from the bank's current cash situation The Reserve Bank has stated that considering the bank's current cash situation, it has been directed not to allow any withdrawal from the depositor's savings bank or current accounts or any other account for that matter. However, permission is being granted for spending on some essential items like salary of employees, rent, and electricity bills. RBI's ban will be effective for six months The apex bank will continue to monitor the bank's situation and modify these directions to ensure the protection of depositors' interests. These restrictions will be effective for six months from February 13, 2025. Depositors can claim up to ₹5 lakh The RBI stated that eligible depositors will be entitled to receive a deposit insurance claim amount of up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation. The central bank has also allowed the financially bewildered lender to adjust the loan amount (if any) from the total amount of money that the depositors can withdraw. Albeit, the central bank said that it will be subject to the conditions stated in the RBI Directions. Co-op bank can deduct loan from total amount that a/c holders can withdraw: RBI The RBI notice has mentioned, "Considering the bank's present liquidity position Bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor but is allowed to set off loans against deposits subject to the conditions stated in the RBI Directions." New India Co-operative Bank's total deposits: At the end of March 2024, the cooperative bank had deposits worth ₹2,436 crore.Original Article