Reserve Bank of India has approved the merger of two more banks. After getting the green signal from RBI, New India Co-operative Bank Limited and Saraswat Co-operative Bank Limited will be merged. On August 1, the Reserve Bank approved the merger of these banks. After which the voluntary merger of New India Co-operative Bank Limited will take place in Saraswat Co-operative Bank Limited Mumbai. Actually, a scam of 122 crores was revealed in New India Co-operative Bank, after which it came on the radar of investigation agencies. After the investigation, the bank was locked and now it has been merged with Saraswat Bank.

Which two banks will be merged

After the approval of RBI, there has been a voluntary merger of New India Co-operative Bank Limited and Saraswat Co-operative Bank Limited. This merger has come into effect from 4 August 2025. The special thing is that these two banks of Mumbai are considered better banks in cooperative banking. Both the banks have been working in the cooperative banking sector for a long time, but now due to increasing pressure on the banks, the path of merger is being adopted. After this merger, i.e. from today, all the branches of New India Co-operative Bank Limited will function as branches of Saraswat Co-operative Bank Limited.

Why the decision was taken to merge the banks

Actually, New India Co-operative Bank was under regulatory supervision since February 2025. The bank officials were accused of embezzling Rs 122 crore. In view of the financial irregularities going on within the bank and the safety of the account holders, the Reserve Bank dissolved the board of New India Co-operative on February 14 itself. Many restrictions were imposed on the bank, withdrawal limits were set from the bank account, the bank accounts were being investigated. Now RBI has approved the merger of the bank.

How big is New India Co-operative Bank

Let us tell you that New India Co-operative Bank was doing better work in the cooperative sector. The bank has a long history. By March 2025, the total assets of New India Co-operative Bank were more than Rs 1100 crore. It had 27 branches, most of which were located in Mumbai. Due to the irregularities going on in the bank, RBI has now decided to merge the bank while protecting the interests of the account holders.

What will be the impact on account holders after the merger of banks

After the merger of the bank, there will be no effect on the deposits of the account holders, their accounts, loans and FDs, that is, the money deposited in the bank will remain the same. After this merger, the account holders will get better services, strong banking network and technologically advanced facilities. New India Co-operative Bank has been merged with Saraswat Bank, which is the largest bank in the cooperative sector. However, due to the merger of the bank, some paperwork may increase for the account holders of New India Co-operative Bank. There may be changes from passbook to new checkbook, new IFSC code.

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Most of the 28 branches of the cooperative bank are in Mumbai

Apart from this, former Chief General Manager of State Bank of India (SBI) Shrikant was appointed as the administrator to manage the operations. Most of the 28 branches of this cooperative bank are in Mumbai metropolis. It has two branches in Surat, Gujarat and one in Pune. The Reserve Bank said in a statement that after reviewing the cash position of the bank in consultation with the administrator, it has decided to allow withdrawal of up to Rs 25,000 per depositor from February 27.

With this exemption, more than 50 percent of all depositors will be able to withdraw
their entire outstanding amount. According to the ban imposed by RBI, the bank’s account holders could not withdraw money from their accounts. At that time it was told that these orders will remain in force for the next six months. However, the Reserve Bank has already given some relief in this. While imposing the ban, RBI had said that this ban has been imposed due to concerns about the monitoring of the bank and its cash shortage.

Three accused related to New India Cooperative Bank scam have been arrested. EOW had arrested the bank’s former CEO Abhinay Bhoan in connection with the fraud of Rs 122 crore. Earlier, accused Hitesh Mehta and Dharmesh Paun were also taken into custody. Both were sent to police custody till 28 February. Avinash Bhoan’s role has come to light in the case of missing cash in the preliminary investigation. He was the immediate supervisory officer of Hitesh Mehta.

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This also includes withdrawal of money by depositors. After the instructions of the Reserve Bank, the ban on closing the business of New India Co-operative Bank came into effect from February 13 and will remain in force for the next six months.

According to the RBI statement, in view of the current cash position of the bank, instructions have been given not to allow withdrawal of any amount from the savings or current account or any other account of the depositors.

Out of the 1.3 lakh depositors of this Mumbai based bank, more than 90 percent have deposits up to Rs 5 lakh in their accounts. Let us tell you that most of the 28 branches of this cooperative bank are in Mumbai metropolis. It has two branches in Surat, Gujarat and one branch in Pune.

Quick action in the case

Let us tell you that the Reserve Bank of India had found some flaws in the investigation of the accounts of New India Co-operative Bank. Last Friday, the RBI dissolved the bank’s board for one year and appointed an administrator to handle the affairs. A committee of advisors was also appointed to assist the administrator.

After this, Mumbai Police registered a case of alleged embezzlement of Rs 122 crore against the General Manager and Accounts Head of New India Co-operative Bank and their associates. Now a Mumbai court has extended the police custody of Hitesh Mehta, the main accused in the New India Co-operative Bank embezzlement case, till February 28.

The court has also sent the bank’s former CEO Abhimanyu Bhoan to police custody till February 28. The Economic Offenses Wing of Mumbai Police is investigating the case. Mehta, the bank’s general manager and head of the accounts department, is accused of embezzling Rs 122 crore from the bank’s treasury at different times.

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The post RBI’s New order: Customers of this bank cannot deposit or withdraw their money from the bank for 6 months. Check details first appeared on Rightsofemployees.com.

Hitesh Mehta, the general manager of the bank, who is believed to be responsible for this scam, has been taken into custody. This action of RBI has created panic among the account holders of the bank. People are worried about their deposited money, because many customers had deposited their entire savings in this bank. Now they are facing the problem of meeting EMI, school fees and other expenses. Think once, if this bank closes down, how much money will these account holders get? What does the RBI rule say about this? Today we are going to know this.

After the scam, the biggest worry of the account holders is that their deposited money may get completely lost. Some account holders fear that Hitesh Mehta might have illegally withdrawn money by breaking into their accounts. Customers are confused about the safety of crores of rupees deposited in the bank. The customer support system and mobile app of New India Cooperative Bank are also not working. Due to this, customers are also facing difficulty in knowing the status of their accounts.

As per RBI’s instructions, bank customers will not be allowed to withdraw money. However, payments can be made from the bank for essential things like salary, rent and electricity bills. These restrictions have come into effect from February 13, 2025, which will remain in effect for the next six months.

This is the rule of RBI

The Reserve Bank has also clarified that eligible depositors will get a maximum guarantee of Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC). That is, if a customer has Rs 10 lakh deposited in his account, then he will have the right to claim only up to Rs 5 lakh.

As of the end of March 2024, the bank had a total deposit of Rs 2436 crore. However, until the RBI audit process is completed, customers will not be allowed to withdraw their entire deposits.

This is the new update.

Former Chief General Manager of State Bank of India (SBI), Srikant, has been given the responsibility of looking after the daily functioning of New India Cooperative Bank. Further strategy will be worked out by RBI to restructure the bank and protect the interests of the customers. The depositors of the bank need to be patient for now. Only after the investigation of RBI, the way forward will be clear whether they will be able to withdraw their entire amount or not. Customers who have deposits of less than Rs 5 lakh in the bank are likely to get insurance claim under DICGC.

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This ban on the bank has been implemented from last Thursday for the next 6 months. This ban has been imposed due to huge irregularities in the bank. At the same time, a line of worried customers was seen outside New India Co-operative Bank on Friday. New India Co-operative Bank is a private sector bank of the country, said Reserve Bank of India. Now customers are afraid that their hard earned money will be lost. In such a situation, the question is what should the customers do now.

Actually, this is not the first time that RBI has banned a bank. Reserve Bank of India has taken such action against many banks earlier also. Last year, Shirpur Merchants Cooperative Bank was banned. Earlier, strict restrictions were also imposed on PMC Bank and Yes Bank. Two years ago, similar restrictions were imposed on some cooperative banks in Uttar Pradesh and other states. Customers who have accounts and deposits in New India Co-operative Bank will not be able to withdraw money from their accounts. However, RBI has clarified that the ban will be lifted only after the condition of the bank improves. Now the question is, if a bank closes down, how much money do the customers get back? So let’s know everything today.

If a bank goes bankrupt, how much money will the customers get?

-If a bank collapses or its license is canceled by RBI, then the customers can get a maximum of Rs 5 lakh in their account.

• Deposits up to Rs 5 lakh are covered by insurance (DICGC).
• Only a total of Rs 5 lakh from the customer’s account, FD and savings account will be refunded.
• Even if your money is deposited in different branches of a bank, you will get a maximum of Rs 5 lakh only.

For example, if you have Rs 7 lakh deposited in a bank, 2 lakh in your account, 2 lakh in FD and 3 lakh in some other account and if that bank closes down, you will still get only Rs 5 lakh.

What to do to keep your money safe?

• Instead of keeping the entire amount in one bank, keep it in different banks.
• Deposit money in public sector banks (PSUs) and large private banks.
• Avoid keeping large amounts of money in co-operative banks as far as possible.
• Do not keep deposits of more than Rs 5 lakh in any one bank, as the insurance cover is limited to Rs 5 lakh.

If you have Rs 8 lakh and you have deposited it in two different banks (Rs 4 lakh in each), and if both the banks go bankrupt, you can still get back the entire Rs 8 lakh.

In which bank is it safer to keep money?

• Keep deposits in nationalised (PSU) banks – like SBI, Bank of Baroda, PNB etc.
• Keep it in big private banks – HDFC, ICICI, Kotak Mahindra etc.
• Avoid keeping large amounts of money in cooperative banks as far as possible.

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The post What Will Happen If the Bank is Banned or Closed, How Much Money Will You Get? Explained first appeared on Rightsofemployees.com.

The Reserve Bank of India (RBI) has imposed restrictions on withdrawal of money from savings, current or any other deposit account of a cooperative bank. Under this ban imposed on Mumbai’s New India Co-operative Bank, the bank will not be allowed to issue new loans or withdraw deposits. This step has been taken due to concerns related to the supervision of the bank.

2436 crore rupees deposited in the bank

According to the Economic Times report, depositors have the right to claim insurance up to Rs 5 lakh under the Deposit Insurance Scheme. Depositors have been asked to deposit their claims in the bank. As of the end of March 2024, this cooperative bank had deposits of Rs 2436 crore.

Why did RBI take action

The action comes after concerns over the bank’s liquidity position led the RBI to impose restrictions on withdrawals from savings, current or any other deposit accounts. The regulator has stressed that these measures have been implemented to protect the interests of depositors.

RBI will monitor the condition of the bank

RBI will monitor the situation of the bank and amend these directions to ensure the protection of depositors’ interests. These restrictions will remain in force for a period of six months starting February 13, 2025.

Kotak Bank got relief a day before

A day earlier, the Reserve Bank of India (RBI) has lifted the ban imposed on Kotak Mahindra Bank for more than nine months. With the removal of the ban, the bank can add new customers through its online and mobile banking platforms. Apart from this, the central bank has also approved Kotak Mahindra Bank to issue new credit cards. The ban on the bank was effective from April 2024. Under this, the RBI had banned the bank from digitally onboarding new customers and issuing new credit cards. HDFC Bank, the largest private sector lender, was banned for about 15 months till March 2022.

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