MMCB gropes in dark over Parekh's total dues

For the beleaguered Madhavpura Mercantile Co-operative Bank (MMCB) it is a life-threatening scenario.

While Ketan Parekh has agreed to pay Rs 380 crore, part of his dues to the bank, and several courts are hearing his bail application, the bank is yet to hear anything about the total amount due to it from Parekh. Ketan Parekh's total dues to bank stands at Rs 1,335 crore.

Though MMCB officials wow that all attempts will be made to recover the outstanding Rs 1,335 crore, this is easy said than done since none of Parekh's properties have been mortgaged with the bank.

"Not a single property of Ketan Parekh was mortgaged to the bank when he was given loans. The Rs 380 crore, for which hearings are on in different courts, is the amount Parekh had agreed to pay by August, 2004, so that he could be released on bail," admitted MMCB chairman Jairambhai Patel.

Asked if there were any realistic chances of recovering the total dues, Patel said, "This is the top priority of the board of directors of the bank. The survival of the bank will come under question if this sum is not recovered."

Indeed, the non recovery of the outstanding amount from Ketan Parekh will also impact the payment obligations of Rs 1,525.76 crore towards public and other co-operative banks.

Under the revival plan MMCB is to pay back Rs 142 crore between August 2004 and August 2005, Rs 316.13 crore from August 2005 to August 2006, Rs 304.62 crore from August 2006 to August 2007, Rs 298.11 crore from August 2007 to August 2008, Rs 234. 60 crore from August 2008 to August 2009 and Rs 229.80 crore from August 2009 to August 2010.

When the court first granted a conditional bail to in August 2001, Ketan Parekh had agreed that he will pay back Rs 380 crore within a period of three years, ending August 24, 2004.

However, by August 2004, Parekh paid only Rs 24.27 crore. "That Parekh could pay back Rs 40 crore in just two months, means that he can pay back the promised amount. MMCB has rejected the latest offer made by Parekh to pay Rs 284 crore over the next four years," said Jairambhai Patel.