Surat bank depositors to get money back from Friday

The Deposit Insurance & Credit Guarantee Corporation (DICGC) will start settling the claims of the depositors of the now-liquidated Surat-based Diamond Jubilee Co-operative Bank from Friday onwards.

The disbursal of money will be done by chief minister Narendra Modi, who will hand over cheques to 21 depositors of the bank at a function.

Giving details, district registrar R M Asodia, who is also the liquidator of Diamond Jubilee Bank, said, "Total liability of DICGC towards the depositors of Diamond Jubilee Bank stands at Rs 74.74 crore. The bank has Rs 19 crore in hand, while Rs 55.74 crore was released to the bank by DICGC two days back. The money of all depositors of Diamond Bank would be disbursed within three months."

He said, "DICGC has also released money to settle the claims of the depositors of Suryapur Co-operative Bank and Vikas Co-operative Bank. The disbursal to the depositors of these two banks would also be started shortly."

Diamond Jubilee Bank was caught in a liquidity crisis in 2002. The bank authorities had earlier disbursed loans indiscriminately to BJP leader C R Patil and others, which were never recovered, leading to the collapse of the bank. The license of Diamond Jubilee Bank was revoked by the Reserve Bank of India (RBI) in June last year, shortly after which it was placed under liquidation.

The collapse of Diamond Jubilee Bank was followed by the collapse of six other Surat-based co-operative banks. The depositors had lost in excess of Rs 300 crore on account of the collapse of the seven banks, but with DICGC assuring to settle the claims at the earliest, the depositors are hopeful of getting their monies back soon.

In the meantime, Mehsana MP Jiva Patel, who played an important role in convincing DICGC to release money to settle depositors claims, has asked RBI to accelerate the auditing process of those co-operative banks whose liquidation process is in the pipeline.

The MP has also asked the apex bank to take steps to make sure that the insurance claims of depositors are released within 60 days of receiving the claims.