Meeting with liquidator fails to settle Diamond Bank staff claims

Confusion persists over payment of dues to the 179 retrenched employees of Diamond Jubilee Co-operative Bank even after a liquidator was appointed for the bank last week.

A meeting of the bank's liquidator R M Asodia with the bank employees to discuss payment of dues was held on Tuesday, but it ended without any breakthrough.

Asodia, who took charge as the liquidator on Monday, reportedly told the employees that the government dues would be recovered from the bank first, only after which they would be paid their dues.

The employees, however, demanded that their dues of about Rs 8 crore should be cleared first. The employees also quoted a ruling of the Supreme Court in support of their demand, but to no avail.

Bank Kamdaar Sangh president Natu Patel said, "When the licence of Diamond Jubilee Bank was terminated by the Reserve Bank of India (RBI), we were assured that we would be paid our dues at the earliest."

"The Supreme Court had in 1984 given a ruling that once a bank is taken into liquidation, dues of the employees should be cleared first. We brought this ruling to Asodia's attention, but he said dues to the government would be cleared first," Patel said. The employees have started filling claim forms for recovering their monies from the bank.

"We have started filling claim forms which will be sent to the state co-operatives registrar B K Gupta. Once Gupta approves the claims, and all rules and regulations are followed, we should be repaid our dues by the bank. The payment of dues could, however, be unnecessarily delayed if the authorities continue presenting vague excuses," Patel said.

The employees have, however, agreed to help in managing the bank's affairs. "Asodia requested services of some of the employees to manage the bank's works, which we have accepted and assured all possible help," Patel said.

Diamond Jubilee Bank went bust on August 29, 2002, allegedly due to indiscriminate granting of loans. Police complaints were lodged in connection with the scam against many persons.

As the first step towards taking the bank into liquidation, the Reserve Bank of India terminated its licence on June 19. The number of depositors of Diamond Jubilee Bank is about 85,000 and the total deposits are worth around Rs 108 crore.

About 70 per cent of these depositors have deposits of under Rs one lakh. Diamond Jubilee Co-operative Bank was suspended from clearing house on August 30, 2002.