The Reserve Bank of India (RBI) has imposed strict restrictions on Mumbai-based New India Co-operative Bank, barring it from issuing new loans, accepting fresh deposits, or allowing withdrawals for six months.

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,

The Reserve Bank of India (RBI) on February 14 announced that it has superseded the board of directors of New India Co-operative Bank for a period of 12 months. This comes a day after the central bank barred the Mumbai-based bank from giving out new loans, accepting new deposits and more for a period of six months.

These restrictions came into effect from the end of business hours on Thursday (13 February) and will remain in force for a period of six months, subject to the RBI’s review.

The RBI has said depositors cannot withdraw funds from their savings, current or any other account in the six-month period when the restrictions will remain in place

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.

A day after imposing several restrictions on city-based New India Co-operative Bank, the RBI on Friday superseded its board citing poor governance standards. A large number of bank's customers had gathered at its branches on Friday following RBI's restrictions,