The Madras High Court today issued notice to the Reserve Bank of India and the REPCO bank on a petition seeking to restrain the latter from admitting nominal members and consequently accepting any deposits from them in violation of the RBI norms.
Justice N Kirubakaran before whom the writ petition by one L Prakash, Class A Share holder of REPCO bank, came up, issued notice to RBI, Mumbai, the REPCO Bank Chairman and the Joint Secretary-cum-Registrar of Cooperative Societies, New Delhi, returnable in four weeks.
The petitioner submitted that there was no limit on the contributions that can be received from nominal members of REPCO bank, and as on date, its by-laws provide for acceptance of deposits from nominal members and public without any verification.
The bank had accepted deposits over and beyond its paid up capital, when it is legally not competent to receive any deposits, the petitioner alleged.
He also claimed that REPCO had not only permitted the admission of nominal members as against the regulations and guidelines of RBI but has also extended loans and credit facilities to such members, thus affecting the interest of Class A share holders.
Alleging that authorities in Tamil Nadu, entrusted with the regulation of multi-state cooperative societies have miserably failed to discharge their duties, the petitioner said, "A bare perusal of the representation of REPCO would clearly indicate that the deposits received by it are in excess of Rs 500 crore."
He then prayed the court to restrain the bank from admitting nominal members and consequently accepting any deposits from them.
The petitioner also sought a direction to the Joint Secretary-cum-Central Registrar of Cooperative Societies, Government of India and RBI to take necessary action against the erring officers of REPCO bank.
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