Senior officials of the Guru Raghavendra Sahakara (Cooperative) Bank Niyamitha on Tuesday tried to allay fears of anxious depositors lined up outside its Basavanagudi branch in Bengaluru, after restrictions were imposed by the Reserve Bank of India (RBI).

The RBI imposed restrictions including limiting customer withdrawal of 35,000, sparking fears of a repeat of Punjab and Maharashtra Co-operative Bank Ltd (PMC Bank) in Maharashtra that is embroiled in an over 4,355 crore scandal.

M.Vasudev Maiyya, a former employee and the current chief advisor of the bank said that there were only 62 defaulters in the bank and that all debts will be recovered by 31 March.

“We are not able to concentrate on some of the NPA (non performing assets) account in the last nine months, we do admit it. There is a steep rise in NPA,” Maiyya said on Tuesday.

He, however, said that the bank had securities of 2,200 crore as against 1,700 crore worth of loans.

He said that RBI had conducted an inspection last week and gave the bank 42 days to respond.

“But all of a sudden they (RBI) have come on Friday after closing hours and issued this circular. I don’t know why,” he said.

The RBI has issued a circular in which it states that from the close of business on 10 January 2020, the bank shall not renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse any payments apart from withdrawal restriction of 35,000 by customers.

Maiyya said that 1,317 people had withdrawn over 6.8 crore on Monday and 842 customers had withdrawn 4.20 crore on Tuesday. He said that there was still 60 crore balance in the bank and that people need not worry or panic.

“This is nothing like the PMC bank (and) the situation is completely different,” Tejaswi Surya, the member of parliament from Bengaluru South said on Tuesday. He said that authorities are closely monitoring the situation and will ensure that the interests of the stakeholders will be protected.

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