Cancellation of license of Urban Co-op bank puts depositors in disarray

Baripada: A large number of customers of Urban Cooperative bank in Baripada of Mayurbhanj district are grappling with mental agony since the Reserve Bank India had cancelled the license of the bank citing financial crisis.

The depositors have become frustrated after running from pillar to post to withdraw their hard earned money.

“We have run to the bank more than 100 times for our money, but in vain. Neither we can purchase our medicines nor any other household article as it has become difficult to withdraw our money saved in this bank,” said Gopinath Panda, a depositor.

Another customer Bhagabat Chandra Nayak, a retired government employee has a similar tale to share. Nayak had deposited Rs 30 lakh post retirement but couldn’t withdraw the amount even for the treatment of his ailing wife.

“I was in serious need of money when my wife was fighting a disease at the hospital. She died as I failed to provide her better treatment due to lack of money,” Nayak said.

Though RBI had fixed some guidelines for refund of depositors’ money, no steps have been taken by the bank for interest of beneficiaries, he added.

The RBI had cancelled the license of the bank in 2012 citing precarious financial position of the bank. The Non-performing Assets (NPA) of the bank is assessed at Rs 37 crore.

On the other hand, around Rs 71.62 crore of over 74,000 depositors have been fixed in other banks. Bank officials said some technical and managerial bottlenecks have posed hindrance for refund of their money.

“The money can be refunded to the depositors but some technical and official issues are creating hindrance in this connection. A letter of commitment from the State government to RBI is needed to solve the depositors’ problem,” branch manager Amarendra Kar said.

The then Mayurbhanj Collector had written to Co-operative department to revive the bank. However, no measures have been taken yet towards its revival.

“We have drawn attention of Co-operative registrar for greater interest of the depositors. But, no measures have been taken yet. We hope the government would take serious note of it at the earliest,” Devidutt Das, Management Board member said.

The license of the bank was cancelled due to certain serious irregularities such as raising fictitious entries under branch adjustment/interest receivable heads, huge shortfall in provisioning due to wrong asset classification and under-reporting of NPAs.