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Centre submits MMCB revival package Monday, September 3, 2001

TIMES NEWS NETWORK
AHMEDABAD: The Government of India has filed an affidavit and submitted a notification and revival package for the Madhavpura Mercantile Co-operative Bank, before the Gujarat High Court on Friday.

Five different petitions about the MMCB filed by Jayshree Marketing, Mukesh Parikh, Gujarat Chamber of Commerce and Industries (GCCI), Surat Nagarik Sahakari Bank and Piyush Kapadiya were to come up for hearing before a full-Bench of the court on Friday.

The hearing did not take place, but the affidavit was submitted to the court by the central government counsel MR Shah.

Along with the affidavit by the government filed by SD Indoria, director of co-operation in the ministry of agriculture (department of agriculture and co-operation), a copy of the notification issued by the Centre on August 24 was also submitted.

It said that the Central Registrar of the Co-operative Societies, New Delhi, after observing all the procedural requirements, has now prepared and finalised a reconstruction scheme for revival of the MMCB under section 15 of the Multi State Co-operative Societies Act, 1984. The scheme has also been approved by the Reserve Bank of India.

The notification issued by the Centre said that the central government, vide order dated August 22, 2001, has made an order of moratorium in respect of MMCB, under sub-section (2) of section 45 of the Banking Regulations Act, 1949, for the period from the close of business on August 23, 2001, up to inclusive of the August 29, 2001.

And whereas in the pursuance of the above order, a reconstruction scheme of the MMCB has been prepared under Section 15 of the Multi State Co-operative Societies Act 1984. The RBI has approved the scheme of the reconstruction of MMCB. Central registrar of co-operative societies KS Bhoria made the package and submitted.

The revival package contained two plans, for revival and liquidation of the bank. However, when a meeting of the state and the officials concerned took place it was decided to oppose the liquidation package on the grounds that if such a would be implemented it will have some benefit, but the disadvantage will be that the same would be very harmful for the co-operative sector in the state. Hence, the first scheme was favoured.

It was also feared that the sum of Rs 800 crore that the co-operatives have to give might not be given. The Deposit Insurance and Credit Guarantee Corporation (DICGC) has to pay Rs 464 crore, while the deposits worth Rs 625 crore by the co-operative sector would be retained and so will be Rs 246 crore worth of deposits of the depositors.

It was also submitted that the RBI will ensure smooth implementation of the scheme and that the Centre can take appropriate action if the proper steps are not taken.

Bank took Rs 192 crore as call money, which have not been returned. Of this Rs 93 crore were taken from different co-operative banks and Rs 99 crore from commercial banks, but none of them has been returned. This will now be converted into fixed deposits for four years and from the fifth year it will be refunded in equal instalments. An interest of 7.5 per cent will be calculated on it every six months.

It was submitted that the current administration of the Bank will be replaced by the Board of Management which will take steps to recover debts, modernisation of banks and encourage investment in to the MMCB.

News Source : Times News Network [ Lightning News ]

 

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