Rumours spark panic withdrawal at Metro Co-op Bank in Surat

Officials say collapse of a firm with a similar name caused concern

Worried depositors and account holders of the city-based Metro Co-operative Bank Ltd made a beeline at the bank following rumours that the bank's financial position had gone week.

Depositors thronged the bank, situated at the Shivkrupa Market, Ring Road, and withdrew almost Rs 32 crore within a few hours on Monday.

The depositors did not pay heed to assurances from the bank officials that the bank was stable and financially strong.

Metro Bank chief executive officer Prakash Master said, "The rumours that the financials of Metro Co-operative Bank has gone weak were triggered by reports that Metro Fashions, a textile firm, had gone defunct. We too had heard the rumour on Saturday evening itself and were prepared for the situation on Monday."

"The rush of depositors and account holders started late in the afternoon. About Rs 3 crore was withdrawn within three to four hours, but we had arranged for extra cash from the State Bank of India and Surat District Co-operative Bank. So not a single customer returned empty handed," Master said.

"Several co-operative banks have collapsed in the last couple of years. Many people have lost their monies in such banks. So it is natural that depositors do not want to take any more chances. The situation on Monday was only because of panic," Master said.

"The situation is absolutely normal today. In fact, many of the depositors and account holders, who had withdrawn money on Monday, have re-deposited the amount with us. Metro Co-operative Bank is not a very large bank, but its position is certainly very sound and stable. I appeal to our depositors not to get worried because of rumours," Master said.

Metro Co-operative Bank chairman Kamalkishore Kapuria too expressed similar views.

Kapuria said, "The situation is normal now. There is no rush for withdrawals. Our depositors have realised that talks of the bank becoming weak were only rumours."

"As far as Metro Fashions is concerned, let me clarify that Metro Bank has nothing to do with the firm. The only connection between the two is that Metro Fashions has a current account in our bank," Kapuria said.

"Metro Bank has total assets of Rs 21 crore, while the loaned out amount is around Rs 14-15 crore. I assure the depositors that Metro Bank is not facing any liquidity problems. There is no cause to worry as the bank is sound and stable," Kapuria said.

Many co-operative banks in the state had gone bust in the recent past.

Depostiros of General co-operative Bank have received cheques for the insured part of their deposits. Recurring deposti agents of the Suryapur co-operative Bank are agitating demanding their money back.