BJP MP Tejasvi Surya appealed for calm from panic-stricken depositors of the co-operative bank and urged people to not compare the bank's situation with that of Punjab & Maharashtra Co-operative (PMC) Bank.

news Banking Tuesday, January 14, 2020 - 13:35

Just days after the Reserve Bank of India (RBI) limited withdrawals from accounts in Sri Guru Raghavendra Sahakara Bank in Bengaluru, BJP MP Tejasvi Surya on Monday appealed for calm from panic-stricken depositors of the co-operative bank. 

"After a conversation with the Finance Minister, there is a meeting going on at RBI. The government will do everything in its capacity to protect the best interests of depositors. I urge all of you to not panic," Tejasvi Surya told reporters.

On January 10, the RBI imposed restrictions on Sri Guru Raghavendra Sahakara Bank restricting withdrawals to a limit of Rs 35000 and directed the bank to not grant or renew any loans or advances. "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35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions..."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 uploaded on its website. 

A bank official Muralidhar told The Hindu that the present situation of the bank was due to a default of Rs 350 crore on loans taken over the last three months. 

The bank was started in 1999 and is headquartered in Basavangudi in Bengaluru. The bank's website has posted financial statements up till 2017-18. It showed that the bank had 8614 depositors and made a profit of over Rs 28 crore. 

The bank, however, blames 62 dud loans for its current predicament.

During a meeting with depositors, bank chairman K Ramakrishna struggled to address those who shouted at him demanding money. Many depositors likened the situation at the bank to the situation with the Punjab & Maharashtra Co-operative (PMC) Bank. In September, RBI had imposed restrictions on the imposed regulatory restrictions on the PMC Bank limiting withdrawals to Rs 1000. 

However, Tejasvi Surya insisted that false equivalences should not be drawn by comparing the bank's present situation with that of PMC Bank. "This is nothing like PMC Bank. We will ensure that the interests of stakeholders will be protected. I urge friends in the media to not draw false equivalence with what is happening here with what happened at PMC Bank," Tejasvi Surya added. 

But despite the reassurance of the MP, scores of depositors queued up at the bank's head office in Bengaluru on Tuesday in the hope of news. Many depositors, who were senior citizens, also queued up and shared pained stories of how they deposited money in the bank in the hope of encashing it after retirement. 

"I am not very optimistic having put my money here. I feel I have not been given enough information and I was told about it today in the morning. I put all my retirement remuneration in this but that's life," a depositor told NDTV.