The Reserve Bank of India has started to ease curbs on non-banking financial companies (NBFCs) and banks after they improved their compliance following a series of supervisory restrictions. High interest rates and tighter regulations have been cited as contributors to weak demand and a slowdown in India's economic growth,

However, RBI stated that the bank is allowed to set off loans against deposits subject to the conditions stated in the directions

RBI’s action was necessitated due to certain material concerns emanating from poor governance standards observed in the Mumbai-headquartered New India Co-operative Bank.

India's central bank said on Friday it has taken control of the board of New India Co-operative Bank for 12 months, a day after its depositors were barred from withdrawing money from the lender. The action,

Police suspect Mehta had an accomplice, and the case has now been transferred to the Economic Offences Wing (EOW) for further investigation.

The series of events leads us into a flashback of the cataclysmic failure of another co-operative bank, Punjab & Maharashtra Cooperative Bank or PMC bank. PMC Bank, which itself was merged with Unity Small Finance Bank, went bust in 2022, ensuing the play similar scenes, that are being witnessed today.

All requests for withdrawal of funds were turned down, with banners at branch gates saying deposits would be paid back in around 90 days

Panic gripped customers of New India Co-operative Bank after the Reserve Bank of India (RBI) imposed severe restrictions on withdrawals for six months due to concerns over the bank’s financial stability.