Page 23 - Banking Finance June 2020

CO-OPERATIVE BANK NEWS

Loan fraud of Rs 98 crore of cooperatives if he had any complaint 50,000 per depositor on November 5,
about this bank. It got a reply that 2019. The restrictions were last ex-
at City Co-operative bank they found loans given illegally and tended upto June 22, 2020 in March.
The city economic offences wing (EOW) funds misappropriated. "With the above relaxation, more than
booked several auditors, valuers and 84% of the depositors of the bank will
employees of the City Co-operative RBI extends withdrawal be able to withdraw their entire ac-
bank for allegedly causing loss of Rs 98 count balance." RBI stated. As on 23
crore to the bank by granting loans ille- limit for depositors of
gally. A criminal case was first registered PMC and other 4 banks September, 2019 (date of imposition of
at the N M Joshi Marg police station in The Reserve Bank of India has in- RBI directions), total depositors of the
Central Mumbai and later transferred creased the withdrawal limit for the bank were 9,15,775.
to the EOW. "The accused involved in scam-hit PMC Bank's depositors to Rs However, the process has been af-
this case caused loss to the bank by not 1 lakh from 50,000 earlier. Simulta- fected due to the lockdown on account
properly calculating the value of mort- neously, the central bank also extended of COVID 19 and the continuing uncer-
gaged property for loan, in some cases the regulatory restrictions on the co- tainty around the pandemic. Further,
even nothing was mortgaged against operative bank by another six months the extent of the negative net worth
the loan and in some other cases loans till December 22, a press statement of the bank, and the legal processes
were granted to the relatives of the issued by RBI said. involved in recovery of bad debts also
accused," said an officer. pose challenges/limitations in resolu-
Apart from Punjab and Maharashtra tion of the bank, it said.
A total 56 persons were sanctioned loans Cooperative Bank (PMC) Limited, the
who did not repay the loan. A prelimi- RBI, in separate statements said the Regarding Sri Guru Raghavendra
nary enquiry (PE) was already going on withdrawal limits for depositors of four Sahakara Bank Niyamitha, the RBI said
at the EOW in this matter. The police other cooperative banks under regula- the withdrawal limit has been en-
found irregularities the way loans were tory restrictions have also been in- hanced to Rs 1 lakh per depositor, in-
sanctioned. Investigators are probing creased. These banks include Sri Guru clusive of Rs 35,000 allowed earlier.
where the accused used the money Raghavendra Sahakara Bank Niyamitha, With the latest relaxation, more than
taken as loan and why did they not re- Bengaluru, and Kolhapur-based Youth 54 per cent of the depositors of the
turn it to the bank. The RBI has put a Development Cooperative Bank Limited, bank will be able to withdraw their
cap of Rs 5,000 per month as with- Kerala Mercantile Co-operative Bank entire account balance, it added.
drawal limit from this bank to the 91,000 Limited, Kozhikode; and Hindu Coopera- In case of Kerela Mercantile Co-opera-
account holders in all its 11 branches. tive Bank Limited, Pathankot. tive Bank Limited, Kozhikode, the with-
Anandrao Adasul, 72, chairman of the On September 23, last year, the RBI drawal limit has been increased to Rs
City Co-operative bank, lodged an FIR had placed regulatory curbs on the 50,000 (inclusive of Rs 2,000), RBI said,
with the police. The accused have been PMC Bank, Mumbai after it came and added now more than 89 per cent
booked for breach of trust, cheating across certain financial irregularities, of the depositors will be able to with-
and criminal conspiracy under various hiding and misreporting of loans given draw their entire account balance.
sections of the IPC. The EOW is likely to real estate developer HDIL. The withdrawal limit in case of Hindu
to appoint forensic auditors to exam- Cooperative Bank Limited Pathankot,
ine the exact value of the mortgaged While the central bank continues en- has been increased to Rs 50,000, inclu-
properties to ascertain the worth of gaging with various stake holders to
explore the possibility of a resolution of sive of Rs 25,000 earlier. Now, more
such properties kept as collateral with than 79 per cent of the depositors of
the bank for securing loan. The the bank, it has decided to extend the the bank will be able to withdraw their
whistle-blower, a shareholder of this restrictions for additional six months. entire account balance.
bank had earlier said that Rs 2,535 The Reserve Bank also said it was
crore was given 'fraudulently' as loan. closely monitoring the position and will For the depositors of Kolhapur-based
During the probe police found loans of continue to take further steps as are Youth Development Cooperative Bank
Rs 98 crore were given fraudulently. necessary to safeguard the interest of Limited, the withdrawal limit in-
The EOW's banking unit had last year the depositors of the bank. The with- creased to Rs 20,000 per depositor,
sought details from the commissioner drawal limit was last enhanced to Rs inclusive of Rs 5,000 allowed earlier. T

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