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Madhavpura Bank holds key to masala traders’ fortunes Saturday, April 7, 2001

Ahmedadabad, April 6: If the spice market once took pride in the fact that one of its traders, Ramesh Parikh, had founded the cash-rich Madhavpura Mercantile Cooperative Bank (MMCB), the same traders are in dire straits today with their funds stuck in the troubled bank.

At the Madhavpura spice market in Shahibaug, from which the bank takes its name, almost every trader has borne the brunt of the MMCB imbroglio.
The crisis could not have hit at a worse time, because this is when housewives in the state store up their spices from the wholesale market for the year. ‘‘This is the time we need the money most,’’ says Murlibhai Chhoktani of Natraj Agmark Masala. He said there was hardly any trader in the spice market who did not deal with MMCB’s main branch, located nearby.

Another trader Ashwin Modi expressed the fear that cash-strapped traders would commit suicide if they did not get their funds back. Modi himself has lost Rs 5 lakh in the bank.

‘‘The traders who have bought goods for the season are not able to make their payments,’’ he says. Modi, however, discounted fears that prices would shoot up. ‘‘Traders will dispose of their stock even at lower prices to get money to honour their commitments,’’ he explained.

Though it is difficult to gauge the exact amount of the spice market’s money with the MMCB, sources in the bank said around Rs 100 crore may be in jeopardy. Gujarat Small-Scale Masala Manufacturers’ Association secretary Atul Shah said almost all spice traders in the city had an account in the MMCB.

The MMCB crisis has also cast its shadow on the Naroda wholesale fruit market, the traders of which did most of their dealings with MMCB’s Naroda branch.

Naroda Fruit Merchants’ Association president Lachhmandas Rohra said at least 50 traders had accounts in the MMCB, and that the turnover of the industry has gone down significantly because of this. ‘‘The traders had around Rs 2 crore in their collective current accounts at MMCB,’’ he said.
Commission agent Kadabbhai Fruitwallah said that since his own money was tied up with the MMCB, he had to borrow to pay the farmers from whom he had purchased goods. The commission agents were not receiving payment from traders, he said and added that his turnover had gone down by 50 per cent since the crisis began.

 

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