Century Co-op Bank board set to be superseded

Century Co-operative Bank has written to the Reserve Bank of India (RBI) and the Surat district registrar to supersede the board of the crisis-hit bank.

"Out of the bank's total advances of Rs 15.32 crore, Rs 13.16 crore are in the name of the bank's directors, their family members or friends. Since the directors have failed to repay the loans, we have written to the Reserve Bank of India and district registrar on February 1 to supersede the board," Century Bank CEO Ramesh Rajput said.

After restrictions were clamped on Century Bank by the RBI on September 10 last year, the bank's directors had assured recovery of the loans. The bank was given three months for the recovery. This was extended by two months following a request from the directors. This five-month period expired on January 31, but no money was repaid to the bank by the directors.

"Once the board is superseded, we would be able to file police cases against those directors who have not repaid the bank's dues," Rajput said.

"The board is literally non-existent at present as only four directors are continuing in their positions. Some have resigned, while some others have been suspended owing to their failure to attend the board meetings on three consecutive occasions," he added.

Membership of Century Bank was revoked by the Surat Bankers Clearing House on August 31 last year. Restrictions were placed on it under Section 35 (A) of Banking Regulations Act, by RBI on September 10.

The bank's chairman Hariprasad Malpani is in jail since over three months in connection with a complaint of fraud lodged against him by some financiers. Malpani allegedly misused his powers and committed financial irregularities with the bank, resulting in liquidity crisis.

As on August 31, Century Bank's loan advances were Rs 15.32 crore, which has come down to Rs 13.16 crore as the bank has recovered Rs 2.16 crore. The bank's deposits are Rs 10.30 crore.