Closing of clearing house irks bankers

The clearing activity was disrupted in Surat on Monday as the Surat Bankers Clearing House (SBCH) remained closed due to the bandh called by Vishwa Hindu Parishad to protest the arrest of Kanchi Shankaracharya Jayendra Saraswati.

"Several banks, including Kotak Mahindra Bank, The Catholic Syrian Bank, Oriental Bank of Commerce, and others, had complained to us that they were forced to down their shutters and observe bandh. In view of requests from these banks, we decided to keep the clearing house closed for the day," SBCH president, Narahari Rao, told Business Standard.

"A bank faces many problems and has to suffer heavy financial losses if it is unable to present its return clearing. The possibility of any untoward incident could not be ruled out, and we did not want to take any chance. Hence we decided to keep the clearing house closed on Monday. We will, however, function as normal from tomorrow," Rao added.

The decision to keep the clearing house closed has not gone down too well with the business community.

"It was a wrong decision to keep the clearing house closed. Such bandh calls are given almost every month. It is certainly not right to keep the clearing house closed and stop clearing of cheques worth crores of rupees for one day. The industries are free to participate or keep away from the bandh, but the clearing house should function," said Dinesh Mandalaywala, president, Southern Gujarat Chamber of Commerce and Industry.

The chairman of a co-operative bank also expressed displeasure at the decision.

"The clearing house is not a private body. The clearing house officials could give any reason, but they have no business in supporting the bandh call by keeping their operations closed, as the industries as well as banks have to suffer huge losses because of this," chairman of a co-operative bank said , on condition of anonymity.

The decision, however, found support from another banker. "It is true that industry does suffer heavy loss on account of disruption of clearing activity, but during such bandh calls, there is always the likelihood of violence or untoward incidents. We cannot risk our lives to prevent financial losses, and hence in my opinion, the decision of SBCH officials was perfectly right," chairman of another co-operative bank said.