Rush for withdrawals at Guj Industrial Bank

The financial crisis at several co-operative banks in the state has led to panic among investors.

Depositors of the Gujarat Industrial Bank (GIB) rushed to withdraw their deposits from the Rajkot branch on Monday following rumours of the frail position of the bank. There were also reports that there was a rush for withdrawals at the Surat branch of the bank.

However, the GIB management has denied the rumours. "The bank management allowed easy withdrawals as part of its efforts to remove the confusion created by rumours of the bank's weak position," Navin Bhatt, regional manager of GIB at Rajkot, said.

"Though the depositors and investors were concerned about the safety of their investments in the bank, the easy availability of funds for withdrawal, calmed them down. We have reestablished confidence among the people connected with the bank," said Bhatt.

In the event of the crisis in several co-operative banks at Surat, our depositors were misguided by rumours about GIB," he added.

The Gujarat Industrial Bank has 20 branches in Rajkot, Bhavnagar, Junagadh, Jamnagar and Bhuj. Of these, five are under the Rajkot regional office and all deposits at all these branches are safe, Bhatt said.

The total deposits with GIB is Rs 450 crore with advances of Rs 250 crore. The bank also possesses a multi state co-operative bank license and has a government guaranty of Rs 67 crore, Bhatt added.

Co-operative banks of Saurashtra and Kutch have had a clean reputation.

In case any bank in the region becomes financially weak, the others take charge of the administration and save it, thus retaining the confidence of the people.