He said the bank was registered in 1973 under the Bengal Co-operative Societies Act 1940 and was also upheld by 1984 Cooperative Societies Ordinance 1984 and Co-operatives Societies Act 2001.

He was speaking to reporters in Dhaka on Sunday just after Bangladesh Bank warned people through newspaper advertisements against depositing money with the Mercantile Co-operative Bank.

The Bank Company Act 1991, which made it mandatory for any institution to get license from the central bank for using the word 'bank' as its name, also kept co-operative banks and non-banking financial institutions registered with any other authority under any other law, Chowdhury said.

'Depositors are not only querying us, some of them even wanted to withdraw their money,' the chairman said.

Chowdhury has already met the officials concerned of the central bank to tell them that their warning was not substantiated by relevant clauses of cooperative act and even the Bank Company Act, the guidebook for regulating banks.

The operative bank's deposit stood at Tk34.38 crore while it advanced Tk33.31 crore as of December 31, 2004. The bank runs its small financing activities through 29 branches in and outside Dhaka.