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Directors oppose chairman's move to bail out weak bank Tuesday, October 16, 2001
TIMES NEWS NETWORK
AHMEDABAD: Two directors of the Ahmedabad District Co-operative Bank (ADCB) have opposed their chairman Amit Shah's reported move to extend credit facility to Visnagar Bank.
Pradip Singh Chudasama and Ilesh N Patel, directors of ADCB in a recent meeting with Shah aired their misgivings on credit options being opened to a financially-weak bank.
The duo in a letter to the ADCB chairman have stated, "Visnagar Bank has been given Rs 15-crore credit facility... The bank has been declared a weak bank and yet you have given Rs 15 crores without any security."
Shah however told TNN, "We have no plans to lend any money to Visnagar Bank. This allegation is baseless and is being propagated by people with vested interest."
Chudasama on the other hand while talking to TNN said, "Now the chairman is contemplating extending credit facility yet again to the bank. Why should the earnings of farmers and common masses, deposited with ADCB, be extended to Visnagar. I am against sanctioning of loan under any circumstances to the bank and endangering public money. Like in Visnagar's case our chairman had hiked credit facility extended to two other co-operative banks in the recent past. Both the banks have downed shutters, we can't have a repetition of the same in Visnagar's case, too."
Chudasama threatened to take Shah to court. "I will file a case against the chairman of ADCB for misusing public money. Investing in Maharashtra Krishna Valley Development Corporation (MKVDC), giving loans to sinking banks despite examples like the Madhavpura Mercantile Co-operative Bank (MMCB) defies logic. I hope that my litigation will work towards making every chairman and director of a co-operative bank accountable to the depositors."
This is the second occasion when Chudasama has openly opposed the ADCB chairman when the latter allegedly tried to give Rs 100 crores at 7.5 per cent interest to bail out MMCB. In September he had joined a hunger strike in front of the bank premises.
News Source : The Times of India [India's best Newspaper]