Jamnagar Nagarik Bank liquidated

Depositors are closer to getting insured amount

The Jamnagar Nagarik Sahakari Bank, established in 1955, has finally been liquidated. The state registrar of co-operatives passed an order to this effect on July 21 and has appointed Manoj Lokhande, Jamnagar district registrar of co-operatives, as liquidator for the bank.

This move has now paved the way for depositors to get their insured money of up to Rs one lakh from the Depository Insurance Credit Guarantee Corporation (DICGC).

The bank has begun moves to file claims with the Credit Guarantee Corporation.

The bank, which has a depositor base of 16,000 and total deposits of Rs 14 crore, went bust 19 months ago.

Gunvant Joshi, chairman of the bank, said despite recovery of Rs 7.44 crore and all chances of the bank being revived, the state government has decided to liquidate it.

"This is perhaps the only co-operative bank, where neither the chairman nor the board of directors nor any of their relatives, have taken any loans from the bank," said Joshi.

There are 360 co-operative banks and around 55,000 co-operative societies in Gujarat.

The Reserve Bank of India (RBI) had in January 2003 suspended Jamnagar Nagarik Sahakai Bank from clearing house operations. The Reserve Bank took this step after the co-operative bank failed to respond to the notices sent to it.

The bank had also failed to furnish financial reports to the regulators for a long time, industry sources said. The bank ignored notices sent by several key officials of the Reserve Bank, the sources said.

"I took over as the chairman of the bank when the co-operative was in a very bad position. I tried my best to revive the bank with the help of the employees so that it can repay depositors' money without delay," Joshi said.

"We also took the whole case to the High Court and presented the matter to the Union finance ministry. But we could not solve the problem," said Joshi.

In April 2003, the bank filed a petition with the High Court, requesting permission for recovering outstanding amounts from defaulters.

The bank initiated a major recovery drive after the High Court allowed it to do so. The bank recovered Rs 53 lakh from April to December 2003. The bank has to recover a total outstanding of about Rs 1.50 crore, said Joshi.

The cash liquidity ratio (CLR) of Jamnagar Nagarik Sahakai Bank was 42 per cent. The Reserve Bank norms stipulate that this ratio should be 28 per cent.

The bank's investment in government securities and FDR was Rs 541.07 lakh and advances were Rs 942.85 lakh. The number of shareholders of the bank was 16.084.

Bank officials said all the outstanding amounts will be recovered from defaulters and the depositors will be repaid without fail.

Manojbhai Lokhande said deposits up to Rs 1 lakh are insured with the Depository Insurance Credit Guarantee Corporation.

Harishbhai Mankad, general manager of the bank, lauded the performance of the bank's employees during the crisis.

Banking blues

• Manoj Lokhande, the Jamnagar district registrar of co-operatives, appointed liquidator of the bank
• Liquidation has paved the way for depositors to get their insured money of up to Rs one lakh from the Depository Insurance Credit Guarantee Corporation
• The bank has a depositor base of 16,000 and total deposits of Rs 14 crore
• The Reserve Bank of India the bank from clearing house operations in January 2003