The Hindu : Charminar Bank depositors may be paid back soon

Online edition of India's National Newspaper
Tuesday, Feb 25, 2003

Southern States

Southern States - Andhra Pradesh-Hyderabad

Charminar Bank depositors may be paid back soon

By Our Special Correspondent

Hyderabad Feb. 24. Depositors of the Charminar Bank will be paid back their amounts immediately after the RBI approves the revised package scheme submitted to it a few days ago by the Government. The approval is mostly likely to be given shortly.

This assurance came from the Cooperation Minister, Ch. Ramachandra Rao, in the Assembly today in reply to a question tabled by K. Appala Naidu of the Telugu Desam and K. Haribabu of the BJP. The package would ensure the bank's revival.

The Minister also announced that an inquiry was ordered into the affairs of the Vasavi Cooperative Bank under Section 51 of the AP Cooperatives Act. The mode of payment by the Charminar Bank, explained by him, was that the depositors having below Rs 1 lakh would be paid the full amount, while it would be restricted to 50 per cent for the time being in case of those holding more than Rs 1 lakh. The bank had 1,20,000 depositors with the total amount kept by them touching Rs 150 crores and with 3,500 of them having more than Rs 1 lakh.

Regarding the big loans "managed'' from the bank by some borrowers showing fake documents, an issue highlighted by some members through supplementaries, including the Leader of the Opposition, Y. S. Rajasekhara Reddy, the Minister said recovery was made to the tune of Rs 40.78 crores so far.

A deputy registrar from the Cooperative Department had been appointed as arbitrator for continued recovery through leagal means. Action was launched by the CB-CID to attach properties of certain borrowers and initiate prosecution. Dr. Rajasekhara Reddy and D. Nagender registered their party's protest without a walkout, as also N. Narasimhaiah of the CPI (M) later, at the Minister's "failure'' to spell out as to what action was taken against his predecessor in 1998 or the officials at that time who scrapped the proposal made by the Vigilance wing for a full-scale inquiry into Vasavi Bank.

Members alleged that the chairman of this bank was beaten up and harassed by some directors and that a property was bought at Begumpet with a Rs 30-crore loan taken from the bank with illegal documents. With members raising the issues of other urban coop banks, Mr Ramachandra Rao said the Government was contemplating introducing a new Coop Act to render the system fool-proof.

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