Tension as RBI does a Cyprus on Amanath Cooperative Bank

Withdrawals restricted to Rs. 1,000 a day per account

The Amanath Cooperative Bank here is once again in the news for wrong reasons as the Reserve Bank of India (RBI) has issued a notice curtailing transactions, which led to incensed customers arguing with bank staff here on Saturday.

According to the RBI directive, the bank can conduct a financial transaction of not more than Rs. 1,000 per account a day. Besides, the bank has been stopped from accepting deposits till further orders.

Chaos on premises

Chaos prevailed as hundreds of customers thronged the bank’s head office in Shivajinagar and roughed up the employees to vent their anger. The employees initially tried to pacify them citing a technical snag but the account holders created a ruckus after they came to know about the RBI directive restricting transactions and blocking deposits.

The Shivajinagar police rushed to the spot and managed to bring some order. Later, police officials convened a meeting with the senior bank executives and the account holders, who were assured that the matter would be resolved by Monday.

“There are thousands of account holders from the minority community who have deposited money in the bank besides having their salary accounts. But right from the inception, the bank has been mired in controversy and we are always worried about our money,” said Mustaq Ahmed, an account holder, who was part of the protest on Saturday.

‘Shocked’

Meanwhile, the bank’s chief executive officer Naseer Ahmed told The Hindu he was shocked by the RBI’s sudden decision.

“How can it take such a decision? Soon after formation of the new committee, we are doing well and have recovered over Rs. 7 crore from defaulters and reduced the non-performing assets (NPAs). We have also set a target of recovering dues of Rs. 20 crore by June this year to achieve our target.”

The RBI, which is monitoring the bank’s financial activities, has not considered this year’s activities before taking such drastic steps, he said. “We have brought it to the notice of Urban Cooperative Bank officials and the Registrar of Cooperative Societies, seeking their help to lift the RBI restriction. A meeting has also been scheduled with RBI officials on Monday and we hope that everything will be normalised.”