The Gujarat registrar of co-operative societies is learnt to be contemplating issuing a show-cause notice under Section 76 B of the Gujarat Cooperative Societies Act, 1961 to the board of Shree Laxmi Cooperative Bank Ltd (SLCB) asking why it should not be superseded in view of the financial irregularities that have come to light.
Disclosing this, knowledgeable sources said that the Ahmedabad district registrar, who was directed by the Gujarat RCS to conduct an inquiry to find out the exact reasons for the closure of SLCB with effect from October 8, has detected a large number of financial irregularities in the functioning of the bank.
A team of Reserve Bank of India (RBI) officials, who had scrutinised the books of SLCB have also confirmed these irregularities. Consequent to the above inquiry and scrutiny, it has also been ascertained that the closure of the bank was because it did not have any funds to conduct day-to-day business, and not because of any call for indefinite strike issued by its staff union, as was being maintained by the SLCB chairman Dinesh Dani.
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RBI is also learnt to have put SLCB under a directive under section 35(A) of the Banking Regulation Act, which effectively means that the depositors cannot withdraw their deposits in excess of Rs 1,000. It is learnt that because of a liquidity crunch in the bank, it is difficult for SLCB even to disburse at the rate of Rs 1,000 per depositor.
Sources said that SLCB had given personal loans of Rs 83.79 lakhs to its chairman Dinesh Dani, out of which Rs 45 lakh was as secured loans and Rs 38.79 lakh as unsecured loans.
Similarly, the bank's vice chairman-cum-managing director Trilok Parikh had availed personal loans to the tune of Rs 59.89 lakh, out of which Rs 58.80 lakh was as secured loans and Rs 1.09 lakh as unsecured loans.
Emphasising that the bank had turned insolvent with a negative net worth and negative capital adequacy ratio, sources said that as against deposits of Rs 19.37 crore, it had made advances of Rs 20.83 crore.
Moreover, SLCB has total borrowings to the tune of Rs 12.65 crore, of which around Rs 11 crore is from the Ahmedabad District Cooperative Bank (ADCB). And as on March 31, 2001, SLCB's non-performing assets was around Rs 5.15 crore.
However the redeeming feature is that 90 per cent of the depositors having deposits of up to Rs 1 lakh, in the event of liquidation of the bank, would get their money bank through the Deposit Insurance and Credit Guarantee Corporation (DICGC) as the insurance premium has been paid up.