Protect United Western Bank depositors: IGF

The Investors' Grievances Forum (IGF) today said the Reserve Bank of India should ensure total protection to all depositors of United Western Bank, which has been placed under moratorium by the apex bank.

"The interest of the depositors as well as investors are to be protected and strict action has to be taken against wilful defaulters," Kirit Somaiya, president of IGF, said here today.

Small investors have a 59% stake in the bank. Expressing shock at the way the apex bank placed it under moratorium, Somaiya said RBI should ask for merger first before declaring moratorium of the bank, he said.

"How can RBI allow the bank to go for a rights issue only six months back and how can a bank having a deposit base of Rs 6,000 crore become defaulter in a span of five months?" he asked.

Demanding merger or amalgamation of the bank with a healthy bank, Somaiya alleged there must be an 'understanding' between the RBI and Federal Bank, since even before the announcement of the moratorium, the Kerala-based bank had discussed the issue of amalgamating UWB with itself at a board meeting on August 25.