Tamil Nadu: Depositors Go On Withdrawal Spree After Central Bank Of India Asks For NPR Details

The advertisement creates panic among depositors as it claimed to freeze accounts of those who fail to submit the documents before January 31.

India   |   23 Jan 2020 8:26 AM GMT / Updated : 2020-01-24T11:05:19+05:30
Tamil Nadu: Depositors Go On Withdrawal Spree After Central Bank Of India Asks For NPR Details

Image Credit: NDTV

Depositors at the Central Bank of India branch in Tamil Nadu have withdrawn nearly Rs 4.5 crore, a figure six times higher than normal, since Saturday, as panic spread after the bank announced that National Population Register (NPR) document would be used as a valid proof for customer verification.

The withdrawal spree occurred at a branch in Kayalpattinam village near Thoothukudi where 90% account-holders are Muslims.

"Customers were not listening to our words," a bank official said. "The panic was so much that even community elders had to struggle to convince them. Most of our customers were Muslims and many of them had taken out almost the entire amount."

On January 11, the bank had released an advertisement in newspapers listing all valid documents for Know-Your-Customer (KYC) verification, which included an NPR letter. The advertisement, however, failed to specify whether customers needed to submit all documents or any of them would be enough.

The advertisement created panic among depositors as it claimed to freeze accounts of those who fail to submit the documents before January 31.

Several bankers claimed that the Reserve Bank of India and its instructions have triggered panic even before the NPR exercise has begun in Tamil Nadu and many other states.

Amid the confusion, withdrawals rose to Rs 1.85 crore on Monday.

"Normally we would have a withdrawal of around Rs 25 lakh every day," a bank officer told NDTV. "Now this has shot up by six times. People are just leaving a minimum balance in their accounts."

To dismiss the fears, the bank issued a fresh advertisement on January 19, specifying that the NPR letter was optional and other valid documents could also be submitted. The bank also asked community leaders to address the concerns of people and avoid any misconceptions.

The withdrawals slowed down on Wednesday, as only Rs 80 lakh was withdrawn.

RL Nayak, assistant general manager at Central Bank of India, referred to the incident as 'unfortunate'.

"The number of documents usually considered for KYC verification is half a dozen, including PAN card, passport, voter identity card, driving licence, National Rural Employment Guarantee Act card and Aadhaar," he said, adding, "After RBI included NPR letter in the list recently, we had to add it in our advertisement as we cannot deny that in case someone comes with an NPR letter."


Also Read: Central Bank Of India Asks Consumers For NPR Details For Verification, Backtracks Later

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