Administrative panel set up for City Bank

The Co-operatives Department of the Gujarat government on Monday appointed a three-member administrative committee for the scandal-hit Surat-based City Co-operative Bank.

The committee comprises Jagdishchandra Mehta, Manoj Parekh and R R Waghasia. Waghasia is the Surat District Registrar, while Mehta and Parekh are former chairmen of the Surat Peoples Co-operative Bank, and are widely respected in the co-operative banking sector. The panel took charge of City Bank's administration yesterday.

Mehta and Parekh held talks with the bank's shareholders and assured them that all was well with the bank and that their money was safe. In view of this assurance, the shareholders, who were sitting on dharnas outside City Bank since the last five days, seeking removal of R R Waghasia as the bank's administrator, called off their agitation.

On Tuesday, Jagdishchandra Mehta, said: "From what we have studied so far, City Co-operative Bank is financially sound and stable. Other than the said loan of Rs 12 crore, the bank has maintained its cash reserve ratio, statutory liquidity ratio (SLR) and cash deposits ratio (CDR). So there is no cause of worry for the depositors or account holders."

"We will conduct a detailed inquiry into the alleged hawala transaction and ensure that the guilty are brought to book," Mehta added.

The bank is caught in a storm following allegations that it had indulged in a hawala transaction of Rs 12 crore with Suryapur Co-operative Bank.

The agents & depositors of Suryapur Bank had filed a PIL in Gujarat High Court seeking an inquiry into this alleged hawala transaction. In response, High Court, on August 11, superseded the board of City Bank and appointed RR Waghasia as its administrator.

The HC also directed Waghasia to inquire into the said Rs 12 crore transaction and submit a report within 15 days.

In view of the HC directives, the state government appointed the three-member committee to handle administrative work of City Bank, on Monday.