Financial Daily from THE HINDU group of publications
Monday, Jun 16, 2003
Money & Banking
Criminal cases filed against RBI, RCS officials on UCB fiasco
HYDERABAD, June 15
IN A significant development, criminal cases were filed in the Court of Metropolitan Sessions Judge, Nampally, here against two officers of the Reserve Bank of India (RBI) and two officers belonging to the Registrar of Cooperative Societies (RCS) holding them responsible for the fiasco of local urban co-operative banks (UCBs) in the recent past.
Investigations against these officials of the RBI and the RCS were sought under the Andhra Pradesh Protection of Depositors of Financial Establishments Act 1999.
While the case was filed by one of the depositors of the crisis-ridden Vasavi Cooperative Urban Bank, Ms Savitha Devi, the court has admitted the complaint and referred the matter to the Crime Investigation Department (CID) for further investigation.
Announcing these details at the meeting of Welfare Association of Cooperative Bank Depositors here on Saturday, the Founder Trustee of Visu Trust, Mr C.C. Reddy, said the proceedings would be a landmark case wherein two senior most officers of the RBI and the RCS were accused of having wilfully omitted to discharge their statutory duties either in pursuance of a conspiracy entered into by them with the other accused mentioned in the charge sheet filed by the CID or intentionally aiding other accused in committing offences alleged against them in the said charge sheet.
Mr Reddy said the Government officers were not only vested with powers but were also accountable for any commissions and omissions.
In the case of Vasavi Bank, almost two years before the bank has finally closed its shutters, there were consistent complaints against the bank management and loanees that they were hatching a criminal conspiracy to loot the depositors' money. "Neither the RBI nor RCS did anything to stop it nor did they take any steps to expose such conspiracies and punish those involved as per law," Mr Reddy said.
Accusing the RBI and the RCS officials of entering into conspiracy with the fraudulent bank managements, Mr Reddy said the complicity of both the RBI and RCS officers was reflected by the fact that within months after Vasavi Bank was elevated to the status of a scheduled bank, it was notified as a weak bank.
Both the RBI and the RCS officials did little to minimise the depositors' suffering by at least releasing the funds that were collected from the loanees.
"They are still sitting with crores of rupees while the depositors are on the streets fighting for their survival and trying to meet their day-to-day needs. It is thus very clear that the concerned officers named in the complaint by their wilful acts and wilful actions have committed the offences under various provisions of the Indian Penal Code," he accused.
Strongly opposing the one-time settlement packages being offered to the loanees of these failed UCBs, Mr Reddy said, "All the depositors are the shareholders of UCBs and it is their money that is involved in fraudulent actions of the bank management and the loanees and no authority has any right to enter into agreement without the specific participation and consent of the depositors."
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line