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Run on coop bank deposits

AHMEDABAD SEPT. 28. The Reserve Bank of India has slapped a notice on Pragati Cooperative Bank Ltd. after the Ahmedabad-based bank failed to maintain its cash reserve ratio (CRR) leading to panic-stricken depositors thronging its counters to withdraw money.

After the RBI, on Thursday, issued directives under Section 35A of the Banking Regulations Act, 1949, asking the bank to restrict its operations as the CRR had not been maintained since December, 2001, depositors resorted to withdrawals at the Relief Road branch and police had to be summoned to control the crowd yesterday. As of September 24, the bank had deposits of Rs. 23 crores and advances of Rs. 33.13 crores, which were insured under Depositors Insurance and Credit Guarantee Corporation, official sources said. The depositors had withdrawn about Rs. 1 crore in the last three days, bank's sources said adding deposits had dropped from Rs. 60 crores to Rs. 23 crores after the Madhavpura Mercantile Cooperative Bank collapse.

PTI

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