As the RBI`s restrictions on the New India Cooperative Bank entered its second day, angry customers gathered outside multiple bank branches in parts of Mumbai, grappling with uncertainty over their finances are trying to seek answers to their questions.

The Mumbai police have registered a case against the New India Cooperative Bank's General Manager and Head of Accounts along with his associates for allegedly embezzling Rs 122 crore of funds, officials said on Saturday.

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.

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

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

These directions came into effect on from the close of business on Thursday and are expected to remain in force for a period of six months, subject to review.

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.

The Reserve Bank of India (RBI) has imposed restrictions on the New India Co-operative Bank in Mumbai due to supervisory concerns about its liquidity position. These include a freeze on withdrawals and prohibitions on granting new loans or investments.