DICGC sanctions Rs 140 cr to Charotar Bank

The Deposit Insurance and Credit Guarantee Corporation (DICGC) has sanctioned Rs 140 crore out of the Rs 240 crore claimed by the liquidator of Charotar Nagarik Sahakari Bank (CNSB).

Chief Minister Narendra Modi will hand over the token insurance claims to depositors on Wednesday, at Town Hall in Anand. The Rs 140 crore is partial disbursement out of a total sanctioned amount of Rs 200 crore.

"Further announcement about the disbursements will be made on August 30 once we work out the parameters of how to distribute the partial sanction," said I P Joshi, liquidator of the bank. "The remaining Rs 60 crore is also expected to get sanctioned soon," added Joshi.

DICGC has sanctioned Rs 200 crore against Rs 240 crore claimed by the liquidator for about 1.85 lakh depositors. A total of 2537 depositors who have deposits of over Rs one lakh in the beleaguered CNSB will be eligible to receive up to Rs one lakh as the insurance covers deposits up to Rs 1,00,000 limit.

The bank was liquidated in July 2003 after the regulator found chairman Chiman Patel, his son and managing director Dipak Patel and directors to be resorting to unlawful practices. The liquidator is in process of recovering Rs 22 crore including loans and interest from the Patel family.

Notices to sell mortgaged properties have been issued by the bank last week after Dipak Patel and his two brothers were directed by the Supreme Court to co-operate the liquidator in selling the properties.

The estimated value of properties mortgaged by Patel family is Rs 4.75 crore as per the last valuation done by the liquidator.

The liquidator is also in process of recovering from other major defaulters like Vadodara based property developer Jayesh Dave of Jayraj Group, Ahmedabad based Pranlal Pultaria of Bhavye Developers and Organisers and Anand based tractor dealer PATCO.

"Papers for the claim for the Visnagar Co-operative Bank is moving fast and it is expected to get sanctioned soon," said Joshi, liquidator for the bank.