No liquidation of co-operative banks in Gujarat before March 31

State co-operatives registrar works out four-pronged turnaround strategy for collapsed banks

The Gujarat government has said none of the 20 co-operative banks in the state, which had collapsed in the past one and a half years, would be liquidated before March 31, 2004.

This also includes the 57-year-old Diamond Jubilee Co-operative Bank Ltd and the new Suryapur Co-operative Bank Ltd of Surat.

"We don't intend to take any of these banks for liquidation before March 31. But if their financial position does not improve even after this deadline, then there would be no alternative left before the government but to take these banks for liquidation," state co-operatives registrar P S Shah said in a communiqu"� to all the administrators of the closed co-operative banks.

"We are in the process of taking a decision," was all that the state co-operation minister Bhupendrasinh Chudasama had to say when asked about the Diamond Jubilee Bank liquidation issue.

The communiqu"� effectively puts to rest the speculation over the future of the Diamond Jubilee Co-operative Bank, which collapsed on September 1 last year.

Several associations had opposed the move to liquidate the bank.

The orders from the state registrar's office came after a review meeting held in Gandhinagar on Monday.

The registrar has also worked out a four-pronged turnaround strategy for the closed banks.

All the administrators and custodians of the collapsed banks have been directed to ensure speedy recovery of the dues.

All defaulters who have taken a loan of Rs 10 lakh and above should be specially targetted, they were told.

In case of any non-cooperation from defaulters, the administrators should not hesitate to lodge a police complaint and a copy of the FIR should be dispatched to Gandhinagar, the administrators were told.

All administrators should keep a tab on the administrative expenses.

Necessary action should be initiated to ensure that decisions from the court come within a stipulated time frame in cases pertaining to arbitration.

In cases where the bank officials have taken objection to granting of loans and the bank directors have used their offices to sanction these loans by overriding the objections, the names of the concerned directors should also be included in the FIR, the administrators were instructed.

Diamond Jubilee Co-operative Bank Ltd administrator B C Patel said after assuming office in July this year, he has strived to protect the interests of the over 88,000 depositors and 16,000 shareholders of the bank.

"Following the joint efforts launched by the administrator and the bank staff, Rs 32 crore has been recovered till date," Patel said. Efforts were also on to recover the pending amount, Patel said.

The bank is also getting due co-operation from the Reserve Bank of India (RBI) and the state co-operation department in speeding up the recovery, Patel said.

The South Gujarat Urban Co-operative Banks' Association has also in a memorandum submitted to the government opposed the move to liquidate the Diamond Jubilee Co-operative Bank Ltd.