Comments
Praveenbhai, a medical store owner in the industrial twin-townships of Pimpri-Chinchwad, wants to shift his current account to Cosmos Bank. Reason: The account he has with Rupee Co-operative Bank has gone dead ever since the Reserve Bank of India placed the Pune-based bank ‘under directions’ on February 21.
According to the RBI, depositors (savings or current) can withdraw only Rs 1,000 once till as long as the Rupee Co-operative Bank remains ‘under directions’, that is, it cannot undertake normal banking operations as the RBI has imposed restrictions finding irregularities.
Under RBI directions
Rupee Co-operative Bank was placed under directions after the RBI discovered the bank’s poor financial health. The RBI has appointed Sanjay Bhosale, District Deputy Registrar of Co-operatives Societies, and Vidyadhar Anaskar, Chairman, Urban Co-operative Banks Federation, as administrators of the bank by superseding its board. The two have been tasked with recovering bad loans and reintroducing financial prudence in the bank.
“All the business transactions have come to a halt. Now, I cannot issue any cheque drawn on Rupee Co-operative Bank to any supplier,” rues Praveenbhai, who opened the account with the bank as much for convenience as for the service offered.
Praveenbhai's working capital, of about Rs 9 lakh, is stuck in the bank.
Praveenbhai says he did not consider opening a current account with a large state-run bank, which is just 50 metres away from the Rupee Co-operative, because of what he called latter’s “poor service”.
Many more in Pimpri-Chinchwad and elsewhere in Maharashtra have been affected, like Praveenbhai.
People opened accounts with Rupee Co-operative Bank because of its service. The bank has 35 branches across the State, seven lakh depositors and Rs 1,400 crore in deposits.
Ganesh Kudale, a restaurant-owner in Pimpri who also has a current account with Rupee Co-operative Bank, said he has been not able to access funds since February 21.
While he is confident that the RBI’s action is in depositors’ interest, he complains of the inadequate notice about the RBI action.
“…It suddenly took this decision and people’s money is stuck with the bank. If such things happen, people will lose faith in the banking system.”
satyanarayan.iyer@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.