Mumbai: Maratha Mandir Co-operative Bank Ltd (MMCBL) witnessed panic withdrawals of up to Rs 10-12 crore (Rs 100-120 million) by depositors in three branches.

"Due to a false propaganda spread by a shareholder on the financial health of the bank, we saw depositors rushing in at our Ghatkopar, Antop Hill and Jogeshwari branches for withdrawing money," MMCBL chairman Ashok Vichare said in Mumbai on Friday (Aug 13, 2004).

In the last two days, withdrawals were Rs 10-12 crore and the bank has withdrawn Rs 50 crore (Rs 500 million) from its balance of Rs 150 crore (Rs 1.5 billion) with Maharashtra State Co-operative Bank and distributed it in the branches to meet the demand, he said.

A Reserve Bank of India (RBI) team had also visited the bank to examine the liquidity position and was satisfied, he claimed.

MMCBL, which has 11 branches and one extension counter, registered a net profit of Rs 25 lakh (Rs 2.5 million) for the year ended March 2004 while its net non-performing assets were on the higher side at 25 per cent (Rs 20-22 crore), he said.

The deposits and advances stood at Rs 280 crore (Rs 2.8 billion) and Rs 139 crore (Rs 1.39 billion) respectively, he said adding, the capital adequacy ratio was pegged at 9.9 per cent, which has now increased to 11.2 per cent.

The bank, in a release said, one shareholder, who was defeated in recent election of the board, has lodged misguiding and malicious propaganda against the bank.

Early this week, another Mumbai-based bank, South Indian Co-operative Bank had seen a run on its deposits due to high level of non-performing assets, which resulted in RBI imposing certain restrictions.