The restriction has been implemented for six months and will be subject to review later.  

This means no customer will be allowed to withdraw any money from his or her savings, current or any other accounts of the bank.  

The RBI has given direction to the bank stating that they can adjust loans against deposits under RBI guidelines. It has also allowed the bank to only do essential payments like paying employee salaries, rent and utility bills.  

RBI's action has created a panic among depositors of the New India Co-operative Bank who have besieged the bank demanding their money. 

Speaking to ANI, Mumbai resident Seema Waghmare said, "We deposited money just yesterday, but they did not say anything. They should have told us that this was going to happen. They are saying that we will get our money within 3 months. We have EMIs to pay, we have no idea how we will do all of that." 

New India Co-operative Bank has branches at Andheri, Bandra, Chembur, Ghatkopar, Girgaon, Goregaon, Nairman Point, Kandivali, Mulund, Versova and Santacruz. 

It also has s presence in Pune and Surat. 

The last time a big cooperative bank that went bust was Punjab and Maharashtra Co-operative Bank (PMC) was in 2019.  

Lakhs of depositors lost their life savings and their families went into financial debt because of the mismanagement of money by the directors of PMC.  

According to a report in Money Life, the RBI had imposed a penalty of Rs 22.96 lakh on four cooperative banks, including three from Gujarat and one from Maharashtra, for non-compliance with the directions issued by the banking regulator. The highest penalty was Rs 15 lakh which was imposed on Gujarat based SBPP Cooperative Bank Limited.