Vadodara bank plunges into crisis

Even as the chief minister of Gujarat, Narendra Modi, on Sunday claimed that his one-year-old government has succeeded in checking co-operative bank scams, yet another co-operative bank based in Vadodara plunged into liquidity crisis.

The enraged depositors are planning action against the management of the Swaminarayan Co-Operative Bank (SCB) and the Reserve Bank of India (RBI).

In another development in Surat, former chairman of Gujarat Alkalies and Chemicals Ltd (GACL) and senior BJP leader C R Patil, allegedly the main defaulter and cause behind the crisis of Surat-based Diamond Jubilee Bank, was sent back to jail on Saturday.

The depositors of SCB, who went to the bank on Saturday for transactions, were told that the RBI has imposed section 35 of the Banking Regulations Act, putting restrictions of the transactions over Rs 1,000 for each depositor.

"The RBI imposed the provision of the Act because of the liquidity crisis in the bank and violation of the credit deposit ratio (CDR) norms. As a fallout, the angry depositors gheraoed the management of the bank and shouted slogans against the RBI for not informing them about the development," a source in Vadodara said.

However, the bank's management on Sunday said they are in the process of recovery of loans from the defaulters and the bank has every possibility of coming back to its normal financial condition.

But RBI sources said till the bank manages to recover the major chunk of loans from the borrowers, it will not be allowed to disburse more than Rs 1,000 to each depositor.

Meanwhile in Surat, Chandrakant Raghunath Patil, who is allegedly the main defaulter of the Diamond Jubilee Bank Ltd, was sent to jail again on Saturday.

Patil, along with his associate Chottu Patil, a BJP corporator in the Surat Municipal Corporation (SMC), surrendered to the authorities at the Surat sub jail on Saturday afternoon after the Gujarat High Court rejected their interim bail application on Friday.

Now Patil's regular bail application will come up for hearing on January 16.

On July 26, the High Court had released Patil to mop up resources and pay back Rs 60 crore to the Diamond Jubilee Co-operative Bank which collapsed following liquidity crisis after Patil turned defaulter and allegedly failed to make payment to the bank.

Patil was released on temporary bail following his assurance to the court that he would use the time to sell his properties in Surat and Navsari.

However, Patil failed to raise the amount.

"My political opponents have taken a pledge to finish me off on all fronts. Though I am desperately trying to sell my property, my political foes ensured that I am unable to do so," Patil told reporters at the jail gate.

Patil said he had already surrendered his property documents of the Sachin GIDC land worth Rs 48 crore to the bank authorities.

"Besides, I have also given an undertaking for Rs 40 crore," he said.

The release of Patil had earlier raised hopes among the depositors of the Diamond Jubilee Co-operative Bank that finally they would get their money back.

However, with Patil going to jail once again it seems that their hopes are dashed at least for the time being. Patil, a suspended police constable, had set up five big textile mills. Later, he joined BJP.

Patil also launched two Gujarati newspapers "" a morninger and an eveninger "" and also started a local TV channel.