Govt forms special committees to deal with co-op bank defaulters

The defaulters plagued co-operative banks in the state has made the government sit up and take action. The state government has decided to form state and district level committees that would curb such defaulting activities and recover money from the defaulters.

The orders for the same have been issued at district level and the first meeting of the district level committee will be held in November, said a state government source, here on Monday.

"We have received an order from the state government to form a committee. The committee will consider the proposals by the co-operative banks where they are finding it difficult to curb the defaulters. The committee will also comprise representatives from the police department," said Deepak Dalal, district registrar of co-operatives, Vadodara.

The committee at district level will handle the cases below Rs 5 crore while the state level committee will consider the case above Rs 5 crore.

The district level committee, headed by the concerned District Collector, will comprise the sub-divisional registrar, superintendent of police, deputy commissioner of police, district registrar of co-operatives and bank official or custodian.

The deputy secretary of co-operatives will head the state level committee. The state level committee will include the director general of police (economic offence), and state co-operative registrar.

"The state government have observed non-cooperation of police department in cases of the influential defaulters. The involvement of representatives from the police department will smoothen the procedure for the co-operative bankers," said Dalal.

Both the committees will function for two years and after the completion of the stipulated two-year term, the members of the committees will be changed to ensure impartiality and unbiased attitude towards the defaulters. The district-level committee will meet every month, while the state-level committee will review the proposals bi-monthly.

Two dozens of Urban Co-operative Banks in Gujarat plunged into liquidity crisis in the last two and half years and in most of the cases, default by relatives, friends and also directors of these banks led to the crisis.

Depositors of most of these banks are still awaiting for their deposits to be paid back and the debacle started with the fall of Madhavpura Mercantile Co-operative Bank (MMCB). The latest case in the series is fall of Royal Co-operative Bank in Surat which was suspended by the clearing house on October 6.

The state government which was caught napping as one after another UCB kept falling, and defaulters till recent times managed to roam around without any harm, now being taken to the task and recently few politically heavyweight defaulters also have been sent to prisons, arrest by the police on charges of defaulting the UCBs and money laundering.