The Reserve Bank of India (RBI) on Friday superseded the board of New India Co-operative Bank for a period of 12 months. This comes a day after the central bank imposed several restrictions on the lender.

While the RBI has cited “poor governance standards observed in the bank’’, reports claimed that the action was in response to alleged misappropriation of funds.

A Moneycontrol report said the chief compliance officer of the co-operative bank may have filed a complaint with the Economic Offences Wing (EOW), alleging misappropriation of funds by some of the bank staff.

Following the RBI restrictions, a large number of the bank’s customers had gathered at its branches on Friday. The banking regulator has barred the bank from issuing new loans and suspended deposit withdrawals for six months. The bank has 28 branches, which are mostly located in the Mumbai region.

The RBI on Friday said it has appointed Shreekant, a former chief general manager of SBI, as ‘administrator’ to manage the affairs of the bank. It has also appointed a ‘committee of advisers’ to assist the administrator in discharging his duties. The members of the committee are Ravindra Sapra (former general manager, SBI) and Abhijeet Deshmukh (chartered accountant).

“The action is necessitated due to certain material concerns emanating from poor governance standards observed in the bank,” it said.