Memon Co-operative Bank headquartered at Mumbai banking operations have been put under restriction by the Reserve Bank of India (RBI). There were some rumors about the closure of the bank due to this on Monday the bank faced a substantial withdrawal of money by its customers. Seeing this RBI has put some restrictions on premature withdrawal of fixed deposits while all the customers of the bank will be allowed to operate their savings and current accounts, this was notified by a senior RBI official to TOI.
The RBI official remarked, "The bank is quite liquid. But there were some under-statement of financial data in the balance sheet and its net worth is not fully reflected. So we have put in some operating directions''.
Over the weekend, there were rumors that the bank was facing problems thus on Monday when bank opened for business the customers queued up at its branches to withdraw money. While confirming this Memon Co-operative Bank chairman Imran Furniturewala told to TOI that there were long queues at the bank's branches. He informed that with the help from RBI, the problem of excessive withdrawal of funds was tackled effectively and all customers were paid off.
A newswire report quoted a bank official who stated that the RBI had imposed some restrictions on banking operations which has raised rumors of a closure and the depositors began withdrawing cash.
According to a top bank official the withdrawals were provoked because its major customer base is concentrated in the lower income group with average deposit size of about Rs 8,000. Approximately 45% of the bank's deposits were in current accounts and savings accounts. The bank is carrying out its operations through 19 branches spread over Maharashtra and
Official informed on Monday during the day about Rs 17 crore in cash was sent to its branches to meet the emergency liquidity requirements; it received about Rs 9 crore as inward clearance.