The Central Bank of India had put out the notification on January 11.
Police and bank officials said the people panicked as social media created a scare that the notification had been issued to 'punish' them for taking part in an anti-CAA-NRC protest recently.
They said Rs six crore had so far been withdrawn, mostly by women. Many of the accounts were held by Non-Resident Indians, they said.
The bank has now clarified through public announcements that the notification was a routine one and the depositors' money was safe.
Shakeel, a local Congressman and social activist said the notification was published about two weeks after an anti-CAA and NRC rally was held, in which hundreds of people took part.
Bank officials said the withdrawals have come down since Friday, as people have now understood the facts.