<b>Is Shree Laxmi bank going Madhavpura way?

Is Shree Laxmi bank going Madhavpura way? Friday, October 12, 2001

TIMES NEWS NETWORK
AHMEDABAD: In a clear indication that another co-operative bank of the city was going the Madhavpura way, the Shree Laxmi Co-operative Bank closed down all its five branches in the city on Tuesday, leaving 40,000 depositors in the lurch. Big crowds gathered at the bank's five branches where they were told that the bank was closed due to a staff strike.

However, in its immediate inspection report following the crisis on Wednesday, the office of the Registrar of Co-operative Societies said that huge erosion of funds had taken place, due to poor recovery of loans, which has forced the bank to down its shutters.

The bank management has claimed, in a notice put up outside its branches, that the bank closed down because its employees are on strike. But repeated attempts made by TNN to contact the bank's chairman Dinesh Dani proved futile.

Laxmi Co-operative Bank has been ailing for the past 10 years, and had been classified as a weak bank since 1991. It has a deposit base of Rs 19.37 crore as on March 31, 2001.

While total advances of the bank stood at Rs 20.82 crore, share capital and reserves were Rs 1.40 crore and Rs 4.53 crore respectively. Besides fixed deposits, the bank has taken cash credit of Rs 12.34 crore from Ahmedabad District Bank.

On the second day of the crisis, the bank was not able to participate in clearing house activities of the Reserve Bank of India.

The bank management has also informed the RBI that the bank would not be able to take part in clearing house activities. Since the bank branches closed, worried depositors of the bank were gathered at the branches of the bank.

Considering the asset-liability situation of the bank, it seems difficult for it to resume operations, sources in the state co-operative department told TNN.

Meanwhile, the RBI also convened a meeting to take the stock of situation in the crisis ridden bank and also discussed various measures on how to tide over the crisis.

Besides advances, the bank has invested Rs 58.30 lakh in call money as on March 2000. Cash on hand was Rs 76.06 lakh and other investment of the bank stood at Rs 91.56 lakh.

The crisis in Shree Laxmi Co-operative Bank comes on the heels of the failure of two other Ahmedabad based co-operative banks, Madhavpura Mercantile Co-operative Bank and Classic Co-operative Bank.
News Source : The Times of India [India's best Newspaper]

This site is dedicated to our friend Younus M, who passed away on 28th Sept 00, and left on us an indelible memories ! - Team GujaratPlus.com

[P] Privacy Policy | © Copyright 2000-2006 | Designed & Hosted by eZee Web Solutions