The Hindu Business Line : Anand bank depositors may get paid in 4 months

Ahmedabad April 1 Even though the Reserve Bank of India (RBI) had cancelled its banking licence, the depositors of Anand Urban Cooperative Bank Ltd need not worry as the bank would be on its feet again as soon as it recovers loan dues and settles court cases pertaining to non-performing assets (NPAs), its Chairman, Mr Vijay Master, has said.

But Ms Mythili Ramakrishnan, Assistant General Manager (Urban Banks Department), RBI, Ahmedabad, said the bank could not be revived at present. "We will, however, make efforts to ensure that the depositors get up to Rs 1 lakh from their deposits within three to four months. The liquidator would soon prepare a list of depositors and advise us in this regard. We would then have these records checked by chartered accountants before clearing payments."

On March 27, RBI cancelled the bank's licence as it ceased to be solvent and when all efforts to revive it, in consultation with the Gujarat Government, failed. The RBI also directed the Registrar of Cooperative Societies, Gujarat, to wind up the bank and appoint a liquidator. On Thursday, the Registrar appointed Mr Deepak Dalal, district-level Deputy Registrar of Cooperative Societies, Anand, as liquidator.

Mr Vijay Master told Business Line that the bank had 34,270 depositors with deposits totalling Rs 22.97 crore, each having less than Rs 1 lakh in deposit account. Altogether 145 depositors had more than Rs 1 lakh as deposits each, totalling Rs 2.75 crore.

The bank still had Rs 10.50 crore as cash, and Rs 24 crore as deposits, besides three buildings worth a valuation of Rs 4.50 crore.

The bank, he said, slipped into the red when years of litigation and compounded interest on unrecovered loans left it with arrears of Rs 26 crore (including NPAs of Rs 19 crore) — more than its deposits. "Despite adverse circumstances, I was able to recover Rs 2.50 crore during the four months I worked as the bank's Chairman," he added. However, all banking business had come to a standstill following the RBI order.

The Anand Urban Bank was among the five cooperative banks that slipped into the red in the wake of panic-stricken depositors withdrawing money after the Charotar Cooperative Bank's alleged scam to the tune of an estimated Rs 400 crore in 2002. In 2005, the RBI stopped the bank from paying its depositors. The three other banks were: The Peoples' Cooperative Bank, Anand Mercantile Cooperative Bank and Sardarganj Cooperative Bank. In fact, the alleged scam had considerably weakened cooperative banks across Gujarat and some of them closed down, including the Ahmedabad-based Madhopura Bank.

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Anand bank depositors may get paid in 4 months