Bengaluru, January 14: Hundreds of account holders and depositors of the South Bengaluru-based Sri Guru Raghavendra Co-operative Bank queued up outside the bank branches across the city on Tuesday. Customers were in a state of panic as Reserve Bank of India (RBI) capped withdrawal limits to just Rs 35,000. The RBI has restricted the bank from doing business with immediate effect. Reports inform that scores of customers gathered at all eight branches of the bank across the city but the bank authorities avoided any interaction with them.
The Central Bank has said that the licence of the bank has not been cancelled and it can continue to "undertake banking business with restrictions till its financial position improves". The lender cannot issue new loans or make any new investments without prior approval from the banking regulator for the next six months.
Panic Grips Depositors of Sri Guru Raghavendra Co-operative Bank
The Sri Guru Raghavendra Sahakara Bank has some 9,000 depositors. Reports inform that most of the bank's depositors included senior citizens and pensioners. On Monday, hundreds of angry depositors crowded an auditorium in Bengaluru to seek clarification on the safety of their deposits. Reports inform that the bank had invited them to assemble there for a briefing.
One of the depositors was quoted by ANI saying that her husband has fixed deposit in the bank of around Rs 15-20 lakh and the family is dependent on it. "My husband has a fixed deposit here - around Rs 15-20 Lakh. He is retired. We're dependent on it. When we got the message we were disturbed. But when we came here, the advisor in the bank told us that deposit is safe. But we need to wait for 6 months. We're not happy", she said.
Here's the tweet:
Depositor: My husband has a fixed deposit here - around Rs 15-20 Lakh. He is retired. We're dependent on it. When we got the message we were disturbed. But when we came here, the advisor in the bank told us that deposit is safe. But we need to wait for 6 months. We're not happy. pic.twitter.com/9s0Kmv4JpW
— ANI (@ANI) January 14, 2020
RBI's Statement on Sri Guru Raghavendra Co-operative Bank Crisis
"...As from the close of business on January 10, 2020, the aforesaid bank shall not... grant or renew any loans and advances, make any investment... In particular, a sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions..." the RBI said in a statement.
The Sri Guru Raghavendra Sahakara Bank Chairman K Ramakrishna on Monday assuring depositors that their money was "100 per cent safe" with the bank and claimed that 62 loans had locked up Rs 300 crore of deposit.
Meanwhile, BJP MP Tejasvi Surya has urged depositors not to panic and said Union Finance Minister Nirmala Sitharaman is appraised of matter & is personally monitoring the issue.
Here's the tweet by Tejasvi Surya:
I want to assure all depositors of Sri Guru Raghavendra Co-operative Bank to not panic.
Hon’ble Finance Minister Smt. @nsitharaman is appraised of matter & is personally monitoring the issue. She has assured Govt will protect interests of depositors. Grateful for her concern. pic.twitter.com/pmoAcUFAu7
— Tejasvi Surya (@Tejasvi_Surya) January 13, 2020
The Sri Guru Raghavendra Sahakara Bank surfaced months after a similar lender, Punjab and Maharashtra Co-operative (PMC) Bank, imposed withdrawal limit following an order from the RBI.