Rs 400 crore of 35,000 account holders stuck in the bank
Chhatrapati Sambhajinagar: The Ajantha Urban Co-operative Bank has found itself under the shadow of Reserve Bank of India (RBI) restrictions for a duration of six months. The news led to a surge of worried account holders converging at the Mondha branch, seeking clarity about their investments.
Around 35,000 account holders, who collectively invested a substantial sum of Rs 400 crores, are affected by these restrictions. Chetan Gadia, the branch manager, assured account holders that not a single rupee would be lost. The gathered crowd, still reeling from the Adarsh Credit co-op society scandal, was relieved to learn that the issue was regulatory restrictions rather than fraud.
The imposed technical restrictions might delay fund retrieval for a few months, prompting the branch manager to call for patience among account holders. The bank's Board of Directors is actively working to lift the restrictions, and Gadia said that operations would return to normal soon. Account holders with investments up to five lakhs will be guided to fill out application forms for speedy reimbursement through the existing insurance coverage.
Criticism and demands mount
MP Imtiaz Jaleel, expressed strong criticism towards the state government, the RBI, and the cooperative department for the successive failures of cooperative banks. He highlighted the need for comprehensive control mechanisms, citing malpractices by auditors, chartered accountants, and bank directors as the root causes behind such financial crises. Jaleel demanded that the state government provide an explicit guarantee for customer funds in civic cooperative banks, emphasizing the importance of stricter regulations and accountability for influential individuals involved in these institutions.
Review period and future prospects
The imposed restrictions on Ajantha Urban cooperative bank came into effect on August 29 and are set to be reevaluated after a six-month period, as stipulated by the RBI. The circular assures the continuation of routine bank operations during this review period. The fate of the bank and the subsequent course of action will be decided following the comprehensive assessment after the specified timeframe.