HC asks liquadator of defunct bank to pay Rs 15.16 Cr to DICGC

The Madras High Court bench here today directed liquidator of the defunct Madurai Urban Cooperative Bank to pay Rs 15.16 crore to the Deposit Insurance and Credit Guarantee Corporation and use the balance of Rs 9.18 crores to pay individual depositors.
Justice V Ramasubramanian and Justice V M Velumani in their order said the "Corporation would have to do some sacrifice for a temporary period and wait for its entire liability from the bank to the Corporation to the tune of Rs 22.29 crore was cleared.
After the payment of Rs 15.16 crores, the balance could be paid as and when the recovery was made from the borrowers.

The Judges pointed out that the court monitored the case because the persons who borrowed the money from the bank in liquidation had filed several cases before various courts, and obtained stay on recovery.
It was only due to the court's intervention Rs 25 crore was collected from the borrowers. Still there were borrowers who will have to pay the money.
The bank was wound up in 2005 after its financial position deteriorated due to various irregularities committed allegedly by its Secretary and others. It was facing a loss to the tune of Rs 60 crore at the time of liquidation. Then it had to refund Rs 51.61 crore to depositors whereas its assets was only Rs 4.2 crore including bad, doubtful and non performing assets.