Financial Daily from THE HINDU group of publications
Tuesday, Feb 25, 2003
Money & Banking
Govt moves to compensate Charminar Bank depositors
HYDERABAD, Feb. 24
DEPOSITORS of the Charminar Urban Co-operative Bank, who were left in the lurch after its Chairman committed suicide following financial mismanagement, may have something to cheer about if things shape up as per Government plans.
All those depositors whose money was locked up in the bank will be paid back their money once the Reserve Bank of India approves the revised package scheme submitted to it by the State Government recently.
The approval from the RBI is awaited, according to Mr Chikkala Ramachandra Rao, State Minister for Cooperation.
Responding to concern expressed by members of Andhra Pradesh Assembly, Mr Rao said that the proposed package apart from ensuring that the depositors were returned their money, would also ensure revival of the bank, which was among the largest urban co-operative banks in Hyderabad. Alongside this, the Cooperation Minister also announced that an enquiry was ordered into the affairs of the Vasavi Cooperative Bank under Section 51 of the Andhra Pradesh Cooperatives Act.
Explaining the revival package and the Government efforts in that direction, the Minister said that depositors having below Rs 1 lakh would be paid the full amount, and for those holding more than one lakh would be refunded 50 per cent of their total holding.
It may be recalled that the Charminar urban cooperative bank had about 1.2 lakh depositors and the overall corpus was estimated at Rs 150 crore. Of these, about 3,500 of them had deposited over one lakh in the co-operative bank.
With regard to extending huge loans to some business establishments, the Government has initiated steps to check the fake documents based on which loans were raised.
That apart about Rs 40.78 crore was recovered thus far and a Deputy Registrar from the Co-operation Department has been appointed as an arbitrator to ensure recovery of money locked up with some borrowers.
The Government has also initiated action to attach properties of certain borrowers who used fraudulent means to raise funds from the bank.
The Crime Branch has been handed over the task to initiative criminal action and prosecute those who defrauded the bank.
The leader of Congress Legislature Party, Dr Y.S. Rajashekara Reddy, wanted the Government to initiate action against a borrower who had manhandled the bank chairman, raised funds from the bank, and developed a property worth Rs 30 crore in Begumpet area.
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