Context:
Mumbai-based New India Cooperative Bank has been under the supervision of RBI for 12 months for having issues concerning supervisory concerns and probably funds misuse.
Principle Developments
- The board supersession & the new leaderships: Tirelessly:
- Shreekant took over the reins, ex-Chief General Manager, SBI, now administrator.
- A Committee of Advisors was constituted to support him, which includes:
- Ravindra Sapra (Ex GM, SBI)
- Abhijeet Deshmukh (Chartered Accountant).
Imposition of Operational Restrictions
- Prohibitive of loan issuance and withdrawal stoppage of deposits for a period of about six months that includes February 13.
- RBI cites recent material developments and speaks for protection of the interest of depositors.
- The intervention was warranted due to allegations of fund misappropriation by some of the bank staff.
The Reserve Bank of India intervened occasionally to maintain orderly conditions and curb excessive volatility in the foreign exchange market. The RBI’s intervention spells huge trouble over the financial health and governance of cooperative banks. It thus aimed to stabilize, protect depositors, and investigate possible misappropriation of funds.
