<p>Mumbai:<strong> </strong>A cooperative bank founded by late socialist leader, trade unionist and former Defence Minister George Fernandes is facing a big crisis, with the depositors facing hardships. </p><p>A large number of people were seen outside the branches of the Mumbai-headquartered New India Cooperative Bank (NICB).</p><p>The Reserve Bank of India (RBI) on Thursday <a href="https://www.deccanherald.com/business/rbi-supersedes-board-of-mumbai-based-new-india-co-op-bank-3406223">prohibited the NICB</a> from issuing new loans and suspended deposit withdrawals for six months, starting February 13.</p><p>The RBI on Friday superseded the board of the Mumbai-based NICB for 12 months and appointed Shreekant, former Chief General Manager of the State Bank of India (SBI), as an administrator to oversee the bank’s affairs during this period.</p><p>Besides, the apex bank also appointed a Committee of Advisors to assist the Administrator.</p><p>In a related development, the Economic Offences Wing of the Mumbai Police has registered a case against NICB’s former General Manager Hitesh Praveenchand Mehta for allegedly siphoning Rs 122 crore from its treasury. Mehta, who oversaw the Dadar and Goregaon branches, is accused of misusing his position to commit fraud between 2020 and 2025.</p><p><strong>A storied past</strong></p><p>The NICB has a rich history—the founding fathers of the NICB were inspired by the model of the German Labour Bank, a bank that straddled the divide between workers and businessmen and was one of the largest banks in Germany serving the needs of businesses, industry and workers successfully.</p><p>“The founders' endeavours struck root after a considerable struggle, in 1968 when they began operations as the Bombay Labour Co operative Bank Ltd., under the aegis of our founding fathers, George Fernandes, an eminent trade unionist and a member of parliament and a Minister, and also Ranjit Bhanu, a noted criminal lawyer, trade unionist and an MLA,” the NICB website states. </p><p>“When one of the members of the Bombay Taximen Union (now Mumbai Taximen Union) was denied a loan by a bank, Fernandes united taxi drivers and set up the Labour Bank in the mid-60s, collecting Rs 10 as share capital from every member of his taxi union. It succeeded and many members could buy their own cars. Post Emergency, Labour Bank was renamed as New India Cooperative Bank,” a socialist leader said. </p>
<p>Mumbai:<strong> </strong>A cooperative bank founded by late socialist leader, trade unionist and former Defence Minister George Fernandes is facing a big crisis, with the depositors facing hardships. </p><p>A large number of people were seen outside the branches of the Mumbai-headquartered New India Cooperative Bank (NICB).</p><p>The Reserve Bank of India (RBI) on Thursday <a href="https://www.deccanherald.com/business/rbi-supersedes-board-of-mumbai-based-new-india-co-op-bank-3406223">prohibited the NICB</a> from issuing new loans and suspended deposit withdrawals for six months, starting February 13.</p><p>The RBI on Friday superseded the board of the Mumbai-based NICB for 12 months and appointed Shreekant, former Chief General Manager of the State Bank of India (SBI), as an administrator to oversee the bank’s affairs during this period.</p><p>Besides, the apex bank also appointed a Committee of Advisors to assist the Administrator.</p><p>In a related development, the Economic Offences Wing of the Mumbai Police has registered a case against NICB’s former General Manager Hitesh Praveenchand Mehta for allegedly siphoning Rs 122 crore from its treasury. Mehta, who oversaw the Dadar and Goregaon branches, is accused of misusing his position to commit fraud between 2020 and 2025.</p><p><strong>A storied past</strong></p><p>The NICB has a rich history—the founding fathers of the NICB were inspired by the model of the German Labour Bank, a bank that straddled the divide between workers and businessmen and was one of the largest banks in Germany serving the needs of businesses, industry and workers successfully.</p><p>“The founders' endeavours struck root after a considerable struggle, in 1968 when they began operations as the Bombay Labour Co operative Bank Ltd., under the aegis of our founding fathers, George Fernandes, an eminent trade unionist and a member of parliament and a Minister, and also Ranjit Bhanu, a noted criminal lawyer, trade unionist and an MLA,” the NICB website states. </p><p>“When one of the members of the Bombay Taximen Union (now Mumbai Taximen Union) was denied a loan by a bank, Fernandes united taxi drivers and set up the Labour Bank in the mid-60s, collecting Rs 10 as share capital from every member of his taxi union. It succeeded and many members could buy their own cars. Post Emergency, Labour Bank was renamed as New India Cooperative Bank,” a socialist leader said. </p>