Bank shuts shop, clients want mgmt to be brought to account

May 28, 2012, 07:38 IST | Nivedita Dargalkar

Their sweat money gone without warning, thousands of stranded customers of the 39-year-old Veerashaiva Co-operative Bank Ltd. at Nagardas road in Andheri (East) held a week-long drive (from May 21 to 27) outside its premises to document names of account holders and the amount of money they lost when the institution abruptly closed down on August 3, 2011.

 The clients also organised a protest meeting yesterday at Panipat Maidan, to decide future course of action and legal proceedings against the bank for duping them of their life’s savings. However, not too many are optimistic of getting their money and interest back.

Badelal Gupta, one of the account holders of the bank, who’s been part of organising the campaign, said, “In all 5,000 account holders registered their names and the amount they lost after the bank unceremoniously closed down. We want to ask the concerned authorities that who is now responsible for our money: the government, RBI or Veerashaiva Bank? If need be we will also move court to resolve the difficulties being faced by thousands of account holders currently.”

 Sudhakar Mishra, a Physics professor at MVLU College, who has an investment of Rs 2,25,000 in fixed deposits and savings at the bank, said, “I was supposed to break the FDs to fund my daughter’s marriage. However, the bank closed down unexpectedly and my money got stuck. As a result, I had to borrow from lenders for the wedding.”
“I am a cancer patient and also a diabetic. My medical expenses run up to over Rs 7,000 per month. I had FDs and other accounts worth Rs 3 lakh. I thought I could manage my medical expenditure from the interest I get from my FDs. However, with the money jammed, I am in a fix,” said 70-year-old Carol Castelino.

Requesting anonymity, another account holder, who runs a transport business, said, “We had Rs 38 lakh deposited in our current account. A day before the bank closed down, I issued cheques to my clients. When they tried to withdraw money, the cheques bounced. Since we are a reputed name in the transport industry, we had to pay the money to our clients by mortgaging gold ornaments and our house with a private financier to pool funds.”

“I already had Rs 4 lakh in my account at the bank. I was planning to buy a house at Andheri. A day before the bank closed down, I received a cheque of Rs 11 lakh from a client and deposited it. The bank even cleared the cheque. Shockingly, the next morning I came to know that the bank had closed down and Rs 15 lakh of mine are now stuck. So, I am forced to stay at a rented place in Bhayander,” said 39-year-old Dungarmal Rawal.

The other side
S M Kolur, the ex-chairman of the financial institution said, “The bank was forced to shut as the then board of directors and managers allotted loans to people without proper scrutiny, documents or mortgage. Hence, it became difficult to revive money back from these people.” He added, “ Our current board of directors have filed a criminal complaint against the earlier board of directors and managers on October 3, 2011 at the Economic Offences Wing and the matter is being investigated. The RBI cancelled the bank’s licence and the Commissioner of Co-operative Society, Pune applied to liquidate the bank’s assets. However, we filed a petition in the High Court and obtained stay orders on both as we want to run the bank after attaching the properties of the accused board of directors and the managers. We have also applied to the finance ministry regarding the same.” 

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