10 urban co-op banks in Vidarbha face trouble

Maharashtra co-operation minister Patangrao Kadam has said ten out of 35 urban cooperative banks in Vidarbha were in the red and two banks were graded D in their statutory audits.

"I have instructed co-operative department officials to initiate action against directors and officers of these banks who are involved in the scam," Kadam said.

"We will encourage good banks and pardon minor mistakes but will go after erring directors and unscrupulous elements who want to destroy co-operative financial institutions" he said.

Interacting with newsmen, Kadam and co-operative commissioner, Shailesh Kumar Sharma pointed out that 17 banks are graded A while eight banks are graded B by the auditors.

Kadam made it clear that the co-operative department was monitoring the functioning of the banks graded C and D and assured that the government was committed to protect the interests of the depositors.

In the case of Nagpur Mahila Sahkari Bank, the co-operation minister informed that out of the Rs 88 crore dues, the administrator had succeeded in recovering Rs 30 crore last year. Legal notices for the recovery of the remaining amount have been issued.

Though a restriction on withdrawals has been imposed, the concerns of the depositors' will be addressed, Kadam assured.

He also added that in consultation with RBI, a sum of Rs 2.5 crore had been refunded so far.

Sharma said that investigations are on to ascertain the role played by bank directors and officials and under section 88 of the MCS Act, the government would recover the amount from the fraudsters involved.

Elaborating on the Rs 154 crore securities scam involving Nagpur District Credit co-operative Bank, Kadam said that steps are being taken to bring to justice those involved. The bank's former chairman, now a sitting MLA from Saoner, Sunil Kedar is the prime-accused in the scam.

Already, proceedings under section 88 are on but the process was delayed because as many as 17 writ petitions were filed in the High Court by the ex-directors, he stated.

Seven directors of Nagpur Mahila Bank arrested

Seven directors of the Nagpur Mahila Sahkari Bank Ltd were arrested by the police on Friday in the Aman Hemani case where the bank was duped by the Hemani couple to the tune of crores of rupees.

Police said that offences had been registered under appropriate sections of the IPC against the directors earlier, and only a formal arrest was being made now.