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‘Visnagar Nagrik bank has no liquidity problem’ Thursday, June 21, 2001

AsianAge
Ahmedabad, June 20: The Visnagar Nagrik Sahakri Bank has no problems of liquidity inspite of rush of depositors for withdrawal of cash since the past two days. The Usmanpura branch has so far disbursed Rs 6.5 crores in cash to the depositors, said Urvish Mehta, director of the bank.

As per the RBI directive, the bank, at present, is not allowed to encash premature deposits. Mr Mehta claimed that the bank faced problems because of poor recovery and could not achieve the target due to the earthquake.

He, however confirmed that the bank at present has no liquidity crisis and it will not have to borrow from the state government or the RBI.

However, the depositors who have deposited their valuable savings thronged the Usmanpura branch of the bank from early morning. Long lines were visible outside the bank and depositors had come to the bank to withdraw their premature deposits. However, after standing in line for a long time they were denied their money sighting the RBI directive.

Natwarsinh Jadeja, one of the depositors standing outside the bank said, “We have not kept our hard-earned money in the bank for the benefit of few bank directors. We will form a union and stage protest,” he added. Two mobile vans with over 35 policemen patrolled the branch in case any untoward incident at the bank was reported.

After the crisis MMCB crisis, VNSB had not allowed withdrawal of premature fixed deposits, but it gave loans up to fifty per cent of the fixed deposit’s premature amount.

It also stopped giving such loans after the crisis. As per the bank’s annual report the Net Owned funds were around Rs 75.81 crores this year. During the RBI inspection, it was revealed that these funds were eroded by around 85 per cent and the RBI had asked the bank to be more vigilant while lending funds.

In spite of gross profit of Rs 23 crores on income of Rs 208 crores and expenditure of Rs 185 crores, the bank’s actual net profit for the year was only Rs 11.72 crores, showing no increase over last year.

The RBI has also asked the bank not to declare or disburse dividend without its prior permission. However, the bank has disbursed Rs 1.49 crores as dividend for the current year.

Meanwhile, chairman of Gujarat Urban Cooperative Federation Atamaram Patel said that there was a political motive behind the leaking of the RBI letter to the newspaper. The bank is in very sound condition as far as liquidity is concerned, he added.

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

 

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