Tension prevailed at the Amanath Co-operative Bank head office in Shivajinagar on Friday afternoon when hundreds of depositors who had ransacked several branches in the city staged a protest blocking the busy Bowring Hospital Road after the bank shut down its operations.
The shutdown followed a Reserve Bank of India (RBI) circular on Friday directing it to cease all financial activities after the bank reportedly failed to file its report on recovering dues from defaulters. The RBI, in April this year, issued a notice to the bank to restrict withdrawals from each account to Rs. 1,000 in a six-month period. The bank has been told not to accept any deposits till further orders.
Also, while the RBI directed the bank to allow depositors to withdraw only Rs. 1,000 once in six months, the management allowed withdrawal of Rs. 1,000 a day. Following this, the RBI ordered freezing of all accounts till further orders, which resulted in widespread protests by depositors, sources in the bank said.
As the news spread, hundreds of agitated depositors ransacked a few branches and gathered outside the head office in Shivajinagar raising slogans against the management. The depositors have also filed a complaint with the jurisdictional Commercial Street police requesting their intervention to help withdraw their money.
Sources said that the dues to the bank run up to over Rs. 100 crore and the defaulters include top officials and former directors of the bank. “The management is deliberately not recovering the amount as it indirectly wants to push the issue for liquidation. Once the RBI consents for the liquidation, the process of recovery takes a long time due to prolonged legal procedure and thus saves the defaulters from the present situation,” a source said.
Sources pointed out that the big account holders, who knew about this situation, had withdrawn their money while it was the poor and middle class customers who were affected.
The depositors alleged that the mismanagement of the bank’s affair resulted in financial loss.
“Many depositors had saved money in their account for school admissions, marriage, family functions and Haj pilgrimage. Every plan has now gone haywire,” a depositor said.
‘Money is safe’
Meanwhile, the bank’s chairman Naseer Ahmed told The Hindu that the board was meeting several people, including top industrialists and politicians and leaders of the Muslim community, to discuss the next course of action. “We are planning to raise a share capital and try to save the institution. The other option we have is a merger with other bank,” he said.
“Either ways the depositors’ money is safe and we are working hard to bring back the bank on track,” Mr. Ahmed said.
