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State team to discuss MMCB modalities in Delhi on June 25 Friday, June 22, 2001

AsianAge
Gandhinagar, June 21: A state delegation will leave for New Delhi on June 25 to hold discussions on the composition of the new management of Madhavpura Mercantile Cooperative Bank and the administrative modalities to be worked out for the revival with the Central Registrar at his office.

The delegation will comprise the state registrar, members of the MMCB revival committee and the leaders of the state and urban cooperative banks.

It may be recalled that a decision had been taken in principle on Wednesday for the revival of the MMCB in New Delhi after a delegation led by Chief minister Keshubhai Patel met Union Finance Minister Yashwant Sinha and Union Home Minister L.K. Advani in the presence of Reserve Bank of India officials and Central Registrar.

The new MMCB management will comprise a chairman and a chief executive officer to be decided jointly by the RBI, the central registrar, state registrar and the state government.

Moreover it will have a representative of the Central Registrar, state registrar, RBI and one each from the state cooperatives and urban cooperatives federations.

Each bank that contributes an amount of Rs 50 crores or more will also be entitled to membership in the management. The MMCB will commence its operations within 15 to 20 days, MLA and member of the MMCB revival committee Amit Shah said.

He said that the new management will reclaim the Rs 464 crores under the Deposit and Credit Insurance Scheme to pay off depositors having deposits upto Rs one lakh in the bank.

He also expressed confidence that the new management will wipe out the losses of Rs 1,036 crores within 10 years and start paying dividend to the shareholders from the 11th year.

The bank will be revived with Rs 464 crores from the Depositor Credit Insurance scheme, Rs 800 crores to be pumped in by the state and urban cooperative banks and a freeze on deposits of Rs 600 crores of the state and urban co-operative banks for a period of six months which totals upto Rs 1,864 crores.

From this Rs 1,000 crores will be used to wipe out the losses while the rest will be used for the bank operations. The Centre has agreed on a 70 per cent default guarantee against Rs 800 crores pumped in while the remaining 30 per cent will be furbished by the state government.

Moreover, state and urban cooperative banks that have no deposits with the MMCB will be requested to contribute four per cent of their deposits for the revival.

News Source : The AsianAge Ahmedabad Edition [ The coolest Newspaper for city ]

 

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