Housing societies also affected by New India Coop Bank curbs | Mumbai news

MUMBAI: Not only individual account holders, but housing societies, too, have been caught on the wrong foot by the alleged embezzlement of funds at the New India Cooperative Bank and the resultant imposition of the Reserve Bank of India (RBI) curbs on withdrawal.

For a cooperative housing society and its office bearers, managing finances remains a challenge, especially when the maintenance and other collections are not synced with the rising expenditures as well as inflation rate.

One of the housing societies impacted with the Reserve Bank of India’s curbs on the bank is Jeevan Dhara Cooperative Housing Society in Kandivali.

“The bank is right opposite to our society. It was very convenient for us to operate an account there. As per regulations, it is mandatory for a housing society to have certain deposits in a cooperative bank,” said Rakesh Joshi, chairman, Jeevan Dhara Cooperative Housing Society.

The society has around ₹9 lakh in the bank, which is now blocked. While it has an account in another bank as well, New India Cooperative Bank is where the biggest amount was kept, thereby leading to a dire situation to make ends meet.

As per Model Bye-Laws of Cooperative Housing Society, Number 113, on opening of banking account and investment of funds, “a bank account shall be opened by the society in the nearest state or district central cooperative bank, or a scheduled bank that has been awarded ‘A’ audit class in the last three consecutive years”.

Another housing society that has been impacted is Bhavneet Cooperative Housing Society at Kandivali’s Charkop. “Our society had decided to get structural repairs undertaken prior to this monsoon. For this, we had collected funds from members and ₹70 lakh was deposited in this bank,” shared Sandeep Masurekar, a society member.

The society members are now mulling over whether to carry out the structural repairs or not. Whereas for Jeevan Dhara Cooperative Housing Society, it was a close call, as they had carried out repairs few months back and settled the bills as well before the bank went bust.

On February 24, after assessing the bank’s liquidity position, the RBI permitted all account holders to draw only up to ₹25,000, which is insufficient for a housing society to run its affairs.

New India Coop Bank depositors to move court

MUMBAI: The depositors of the New India Cooperative Bank are rallying together to move court to press for further relief. On Sunday, a meeting of depositors was held at Mira Road while a similar meeting was organised on Wednesday at Goregaon West.

“The point is how much relief do the depositors want, ₹5 lakh or more?” advocate Ashok Kumar Upadhyay asked while addressing the Mira Road gathering. He explained that in the case of Kapol Cooperative Bank, which is under liquidation, depositors could get ₹5 lakh only. Hence, the depositors will lose out if appropriate legal measures are not taken now.

“We want the fight to be legal to recover every paisa. Best of the lawyers should be appointed to fight for the rights of the depositors. After all, the bank has earned from the funds we had parked there and through home loans as well,” said Smita Date, a resident of Mira Road and a depositor in the bank.

“The solution is in going to the court. The way Life Insurance Corporation of India has sovereign guarantee towards the investors, similar guarantee is needed for bank depositors as well, irrespective of the financial institution,” demanded Ashish Mishra, convener of an informal group, Voice of Victims.

“Those who want to join this writ petition are requested to come together by paying for the advocate’s fees. The main thrust is to demand protection of depositors’ entire funds in the bank,” said Vishwas Utagi, secretary, Bank Depositors Protection & Welfare Society and former general secretary of All India Bank Employees Association.

In the Goregaon West meeting, held on Wednesday, a decision was taken to file a writ petition in the Bombay high court, which was upheld in the Mira Road meeting on Sunday.

The petition is likely to be filed in court later this month.