MMCB rejects new KP payment plan

Ketan Parekh offers to pay Rs 50cr by May '05 in 5 installments.

The Madhavpura Mercantile Co-operative Bank Ltd (MMCB) has rejected the offer of gilt scam-accused Ketan Parekh to pay back Rs 50 crore of his dues to the bank by May 2005 in five equal installments.

The bank has also contended the claim of Parekh that he had not agreed to pay back Rs 380 crore to the bank by August 2004, as a result of which his conditional bail stands cancelled.

MMCB chairman Jairambhai Patel said on Thursday that Parekh must not only pay back his dues worth over Rs 1,390 crore, but also be responsibility for the Rs 240 crore defaults of Shirish Maniar group and Maukesh Babu group, for which he or his companies are named guarantors.

"When the court first granted him conditional bail in August 2001, Parekh had agreed that he will pay back Rs 380 crore within three years ending August 24, 2004. He is now changing his stand, and any new repayment terms are not acceptable to the bank," Patel said.

He said Parekh in the initial court hearings had agreed to repay Rs 16.40 crore in six months and Rs 380 crore in three years beginning August 2001. The figure Rs 16.40 crore was arrived at because the total number of deposits of customers who had up to Rs 1,000 each in their accounts was Rs 16.40 crore, while the amount of deposits of customers who had up to Rs one lakh in their accounts (the sum that is insured with the Deposit Insurance Credit Guarantee Corporation) was Rs 380 crore.

Asked why the CBI was not arresting Parekh despite the special CBI court issuing a non-bailable warrant against him, Patel said he would prefer not to answer, as this was a matter concerning the investigating agencies.

Patel also declined to comment on the present whereabouts of Parekh. Parekh approached the Gujarat High Court on Thursday, proposing to pay back Rs 50 crore to the bank by May 2005 in five equal monthly installments of Rs 10 crore each and that he would submit the repayment schedule for the rest of the amount after May 2005.

The Reserve Bank of India has suspended MMCB from clearing operations in March 2001, after a preliminary inquiry revealed that the bank was facing a liquidity crunch and was in the eye of the pay order scam involving Parekh.

The crisis-hit bank has hastened its recovery process after the Central government extended the time frame of its revival package by one year. The original revival package period of the bank was scheduled to expire on August 24, 2004.