A gathering of depositors of New India Cooperative Bank, which has been brought under severe restrictions by RBI under Sec 35A, resolved to save the institution from going into liquidation.

The meeting, organised jointly by Mumbai Grahak Panchayat ( MGP) and the Children Welfare Center School, Versova, on Saturday, March 15, on the occasion of World Consumer Rights Day, also resolved to ensure full insurance coverage for their entire deposit amounts without any ceiling.

Addressing the gathering, MGP Chairman and advocate Shirish Deshpande stated that RBI owes an explanation to the bank depositors as to what steps were take by it as a regulator to save the bank when the financial irregularities were brought to their notice two years ago. Depositors must get back every rupee of their deposits, asserted Deshpande who revealed how the provisions of the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act are detrimental to depositors' interests.

The RBI's concession allowing only ₹25,000  withdrawals in next six months is inadequate and a pittance, said Deshpande who asked why depositors should bear the brunt of the mismanagement of bank officials. While deposits up to ₹ five lakh are insured, what happens to depositors with deposits exceeding this limit, he asked, directing his concerns to the RBI and the Finance Ministry.

He pointed that although under the DICGC Act, deposits up to ₹ five lakh  are insured, DICGC collects premium on the full entire deposit amounts with the bank as per Sec 15 of the Act. Criticising this unfair provision under DICGC Act, Deshpande questioned why such an exploitative provision is tolerated in a welfare state like India. Taking insurance premium for full deposit amounts and when risk occurs, to pay only a small portion of that amount to depositors is a brazen unfair trade practice impermissible in law, Deshpande said. He pointed out from DICGC annual report how DICGC is indulging itself into unjust enrichment and making huge unethical profits year after year when ordinary depositors are denied their legitimate, hard-earned deposits and made to suffer huge hardships.

Adding to the injustice, DICGC recently issued a circular dated January 30, 2025, calling upon all bank liquidators to  first repay to the DICGC the total amount disbursed by it to depositors before  returning the remaining money to depositors and even to the ex-employees of such banks. Deshpande strongly criticised this unreasonable and illogical provision of repayment of the sum disbursed to depositors, as per section  21 of the DICGC Act and demanded that the central government repeal it immediately. He also called for 100% insurance coverage on all deposits since DICGC has been any way collecting the premium for full deposit amounts.

He urged depositors to unite and take control of the failing bank, turning it into a model institution with sound business principles. He assured that MGP, along with experts like Ajay Kaul and honest banking experts, would make every possible effort to save the New India Coop Bank. He assured that all efforts, including legal action if necessary, will be taken  to recover their deposits through lawful means.

Legal advisor Sharmila Ranade gave a detailed presentation on how depositors can claim their insured deposits up to ₹ five lakh.Senior journalist Prakash Kulkarni pointed out that scams in cooperative banks have become routine. He criticised the RBI for failing to exercise strict oversight and urged depositors to seek legal recourse against auditors who give clean chits to such banks. He questioned what ordinary citizens could do when financial regulators themselves lose their integrity and sense of justice.

Prashant Kashid, Activity Chairman of CWC assured the depositors full support and assistance in their struggle to get their full deposits back.