Mumbai: The New India Cooperative Bank Depositors’ Foundation have urged Reserve Bank of India governor Sanjay Malhotra to rescue the affected persons from the dire situation they are in following the curbs placed by RBI.
“Through no fault of our own, we now find ourselves in a dire financial situation. We are unable to access our hard-earned savings, which we have accumulated over decades, to meet essential life needs such as our children’s education, medical expenses, old age security, personal activities, and even wedding preparations. Additionally, hundreds of co-operative housing societies across Mumbai and the neighboring Thane district, which have invested funds from their members in NICB Ltd., are also severely affected by this action. The funds invested by individual depositors and co-operative housing societies are currently being wrongfully withheld due to fraudulent activities conducted by the management of NICB Ltd,” Foundation president T.N. Raghunatha observed in a letter to Malhotra.
“The emotional and financial strain that this situation has caused on individual depositors and co-operative housing societies is unbearable. Our basic survival needs are now at risk, and instead of stability, we face uncertainty, anxiety, and distress. For 30 years, we have been loyal customers of this bank, placing our trust in the banking system with the belief that our money is secure. However, with the sudden intervention of the RBI on February 13, 2025, we are left in the dark about what the future holds for us.”
“We fail to understand how a mere Rs 5 lakh insurance coverage can justify the loss of our life savings. This amount is woefully insufficient for many of us, whose deposits exceed this limit. The unfortunate reality is that officials at various branches of NICB Ltd. are pressuring depositors to accept the insurance payout without providing clear answers on the fate of the principal deposits lying in the bank.”
“At first glance, a Rs 122 crore fraud alone should not have been enough to destabilize a bank with a deposit base of Rs 2,436 crore as of March 2024. In the aftermath of the RBI’s intervention, the insurance payouts initiated by the bank—rather than efforts to revive normal operations—indicate deeper systemic issues. There may be undisclosed problems such as significant bad loans, mismanagement, or even more extensive frauds yet to be uncovered.”
“Historically, initial reports in cases like this often only scratch the surface, and the true extent of financial distress becomes evident only after thorough investigations. Bank ratings, which reflect a bank’s financial health and risk level, are crucial indicators. These ratings are determined by evaluating several key factors, such as financial stability, the quality of assets, and earnings performance. It is essential that the RBI communicates these ratings to the public to ensure transparency, allowing customers to make informed decisions about their investments.”
“Given the increasing scrutiny on financial institutions and regulatory bodies, there is a possibility that more comprehensive investigations may follow. However, the outcome will depend on the willingness of regulators and policymakers to address the underlying issues and hold those responsible accountable. Public awareness and media attention will play a crucial role in ensuring that this issue does not fade away without resolution,” the latter noted.
The Foundation has demanded the RBI provide an update on the audit conducted by it, confirm the extent of loss incurred by the bank, quantify the NPAs, full recovery of deposits over and above the Rs 5 lakh limit and revival of the bank at the earliest.
