As daraz said there might be a problem with paths containing spaces.
I'm not sure if ioFTPD.ini likes paths with spaces (or absolute paths) like:
C:\Program Files\ioFTPD\scripts\newdir\banfile.itcl
My suggestion (might not solve your problem though) is to change all paths from C:\Program Files\ioFTPD\scripts\etc. to relative paths
..\scripts\etc. or try using "C:\Program Files\ioFTPD\scripts\newdir\banfile.itcl"
Btw.. B0unTy's NEWDIR script 2.1 works juuuust fine here