'How Will I Survive Without My Monthly Withdrawals?'

'I don't know when I will be able to access those funds.'

The Reserve Bank of India's decision to impose restrictions on the Mumbai-based New India Co-operative Bank following an alleged Rs 122 crore fraud came as a rude shock to thousands of depositors, many of whom had deposited large sums just days ago.

The only visible relief for them is that the deposit insurance claim process has been set in motion, allowing savers to recover up to Rs 5 lakh by May 14.

Around 90 per cent of the bank's 130,000 depositors are fully insured under the deposit insurance cover provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Depositors must submit their claims by March 30, and the money will be credited to an alternative bank account specified by them, DICGC said on its web site.

About 68 per cent of the deposits are FDs, while 28 per cent are in savings accounts.

N Meena (name changed), a middle-aged housewife, said she holds FDs at the Vasant Vihar branch in Thane and is worried about the safety of her money.

"The insurance cover has given me some assurance. This is not a normal experience for us... we will be much more careful while making deposits, as apprehensions will linger in our minds," she said.

The three-month wait for their life savings feels long, as many depositors have immediate expenses.

"The bank is still giving us access to lockers and updating our passbooks," said a housewife who visited the Vasai branch in Maharashtra's Palghar district to enquire.

"I need the funds for surgery. I thought I would wait for the maturity, but now I don't know when I will be able to access those funds," she said.

"Why didn't the RBI conduct proper audits as they should every two months? How was this happening under the RBI's watch? We have been asked to wait for 90 days, but we are not happy with the timeline. We have payments and expenses to take care of. Depositors' money should be returned within a maximum of a week," said Sarika Gujjar, a depositor with the bank's Vile Parle branch.

Many depositors rely on their monthly withdrawals and are worried about their funds being blocked.

"We have deposited all our savings in this bank. I am a housewife now; I don't work anymore. How will I survive without my monthly withdrawals?" said Alpa Joshi.

On February 13, the RBI prohibited the lender from issuing new loans and suspended deposit withdrawals for six months following a complaint filed by the bank's chief compliance officer with the economic offences wing of the Mumbai police.

The complaint alleged embezzlement of funds by some bank staff.

A visitor to the Vasai branch said her mother's savings and FD accounts are with the bank.

"She deposits her pension money here. Now she won't be able to withdraw it. The RBI must make some concessions for senior citizens with medical expenses like my mother. She was expected to have surgery soon," she said.

"I am in the construction business. I recently deposited around Rs 2 lakh into the account two or three days ago, and now it is blocked.

"I also have an account with another bank, so for now, I am fine. But the cheque I issued has bounced. One must always have two or three bank accounts these days," said a depositor.

At a branch near Nitin Company Junction in Thane, there were few customers during closing hours on Saturday.

Staff members said depositors had visited to express concerns about their savings.

"We have explained the RBI communication about the appointment of an administrator and the DICGC's statement on insurance cover. It has given them some relief," said a staff member.

A financial sector advisor who has dealings with the bank said his relatives hold savings accounts with a New India Co-operative Bank branch to receive dividends.

He said he would review the situation before advising them on whether to continue banking there.

Feature Presentation: Aslam Hunani/Rediff.com