Rupee Bank in cash trouble, RBI curbs withdrawals

The bank had been hauled up for alleged mismanagement earlier by the co-operative commissioner. In 2002, the co-operative commissioner dissolved the bank's board of directors and had posted an administrator to oversee the bank's activities.

The news of the RBI action unsettled depositors, many of who had gone to the ATMs to withdraw money. City based businessman Sandeep Khardekar said instead of its "knee-jerk reaction", the RBI should have taken steps to prevent the movement of money of depositors.

"In the Paud Road branch of the bank, I have quite a good amount, which I was planning to use to pay service tax. With the deadline for payment of service tax nearing, the RBI restriction has upset my plans and I would have to make alternate arrangements, which would be difficult," he said.

He said the RBI should have issued corrective guidelines earlier that could have avoided such drastic steps.

Another depositor, Ameya Jagtap, said such actions reflected badly on the bank's administration. "It is the common man who suffers. Faith in the cooperative movement is corroded by such incidents," he said.

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