Depositors left in lurch as Perumbavoor bank faces probe

Officers at the Perumbavoor police station said numerous cases have been registered against the bank and an investigation is on.
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KOCHI: Another cooperative bank in the district has come under the police scanner as multiple cases were registered against Perumbavoor Urban Service Cooperative Bank for failing to return deposits of account holders. As the police probe is moving at a snail’s pace, distressed depositors are now planning to approach the enforcement directorate (ED) for a probe similar to the investigation held in the Karuvannur Service Cooperative bank scam.

Last month alone, the Perumbavoor police registered 11 cases against the secretary of the bank for failing to return the money taken from depositors by offering an interest rate of 8.75%. Between 2011 and 2023, a Perumbavoor resident deposited around Rs 40 lakh as a fixed deposit in three accounts held by his family. After the maturity date, when the depositor reached the bank last month to claim the amount, he was told that he would have to wait for a few months.

“The bank offered 8.75% interest when we made FD deposits in 2011. That was the highest interest rate offered by financial institutions then. Thus our earnings were moved to the accounts of Perumbavoor Urban Service Cooperative Bank. But the bank officials now claim that they have no sufficient money to return our deposits. We came to know that over 30 depositors have filed complaints with the police. However the investigation procedure is moving slowly. Some of the depositors have said they would be filing a complaint with the ED to look into the matter as fraud similar to Karuvannur bank has taken place here as well,” a depositor who did not want to be named told TNIE.

Officers at the Perumbavoor police station said numerous cases have been registered against the bank and an investigation is on. Police officers spoke to the bank governing board regarding the issues in the bank.

“Customers who lost amounts ranging from Rs 5 lakh to Rs 90 lakh have approached us against the bank. Over 11 cases were registered recently. Cases were registered last year also. From the investigation, it was revealed that revenue from the loan business of the bank dried up recently. Hence, the bank could not return depositors’ money,” a police officer said.

Bank president Paul Pathikkal said that all efforts are being taken to resolve the issue. The non-repayment of a loan worth over Rs 70 crore has landed the bank in crisis. He said that improper loan disbursal by previous governing bodies landed the bank in a critical condition now. “It is true that the bank is under severe financial crisis. However, the main reason for the current crisis is improper loan disbursal made by governing bodies that ruled the bank earlier. The loans were given to people above the value of mortgaged properties. The maximum permitted loan amount to an individual was Rs 60 lakh but many persons were given loans above this limit. Now as a majority of these loans remain unpaid, we are struggling to return money to our depositors,” Paul said.

The bank recently filed a report to the assistant registrar of cooperative societies regarding 688 defaulters against whom steps like property attachment should be initiated.

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The New Indian Express