Unkept promises leave scam-hit Karuvannur Coop Bank investors high and dry

The Karuvannur Cooperative Bank at Irinjalakuda in Thrissur district was built upon the toil and sweat of the common man. Today, those who had invested in the bank are a desperate lot, knocking at doors to get their money back.

The bank grabbed headlines after several borrowers received recovery notices for amounts greater than they had borrowed. The borrowers approached the registrar of cooperatives and a probe unearthed a multi-crore scam.

The government stepped in, and pacified the worried investors. “The investors will not lose their money,” V N Vasavan, Minister for Cooperation and Registration, assured them. “It has been decided to form a consortium of Kerala Bank and cooperative societies to return the investment,” he added.

Vasavan made the promise four-and-a-half months ago after the Rs 300-crore scam was unearthed. Today, six months after the fraud had come to light, investors are still running from pillar to post to get back their hard-earned money.

The investors included daily wagers and non-resident Indians who had deposited their life savings.

The bank has introduced a token system to return the money. The investors consider themselves fortunate if they get Rs 10,000 based on the token, once a month or two.

Those requiring money for medical treatment are required to submit relevant documents to prove their need. Still, they could withdraw only a maximum of Rs 50,000 from their account.

Banking on fear

It is estimated that the bank, ruled by the CPM for the past four decades, has more than 12,000 investors, who have deposited Rs 340 crore. A few depositors recently tried to form an action council to ensure the deposits are not lost. However, only three turned up for the first meeting of the collective.

The abysmal turnout has been attributed to the fear among investors. Though desperate to get their money back, fear prevents them from protesting or raising their voice.

All the 11 board members, six employees and a middleman arrested in connection with the fraud, are either CPM leaders, office bearers or party followers.

If the investors remain silent, local leaders approach them with the promise – wrapped in threat – that their money would be returned.

What’s the emergency?

Investors are required to get a token to withdraw money that too, Rs 10,000 at a time. The token for the next withdrawal will be issued only after a month or two. The bank has granted relaxation in withdrawing money for emergencies.

However, emergencies according to the bank have been confined to medical treatment, wedding and education. Money will be released only after the investor submits proof of emergency. Still, only a maximum of Rs 50,000 could be withdrawn.

The other day, the bank officials told an investor with a token that the institution does not even have Rs 10,000 in its kitty. “We will give you the money once we get funds,” the investor was told.

Eight visits for Rs 10,000

A woman, who requested anonymity since she feared losing her deposit of Rs 1.5 lakh, said she had invested money earned through the employment guarantee scheme and her daughter’s savings from her salary from a textile showroom.

She was told to get a token for withdrawing money, and later visited the bank several times with the token. “I had to make eight visits to withdraw Rs 10,000,” she said while expressing apprehension that she might lose the remaining deposit.

A group of auditors had recommended the government to grant a package of Rs 140 crore to keep the bank afloat. However, nothing has happened. The bank, too, has no answer to when the money would be returned.

Skeleton of a dream

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