The Reserve Bank of India (RBI) has directed the Surat-based Century Co-operative Bank Ltd to expedite its recovery process. | |
| The direction follows a report of an RBI team, which had conducted an inspection of the crisis-hit Century Bank in November. |
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| RBI had issued a four-month recovery period to Century Bank in view of the financial irregularities committed by the bank chairman, Hariprasad Malpani. |
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| Since its membership was revoked by the Surat Bankers Clearing House on August 31, the Bank has recovered Rs 1.76 crore. Its loan advances, including the temporary over draft, have come down from Rs 15.32 crore on August 31 to Rs 13.56 crore on January 6. |
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| The bank's deposits have also come down from Rs 12.63 crore on August 31 to Rs 10.30 crore on January 6. |
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| Century Co-op Bank chief executive officer Ramesh Rajput said, "The bank has recovered most of the small loans. Of the 300 loan accounts, money has been recovered from 160. There are still 140 unsettled loans." |
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| "We have issued notices to all these account holders. We have already filed civil suits against 55 loan defaulters in the board of nominees. In case the bank's money is not repaid, we always have the option of filing police cases against defaulters," Rajput said. |
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| "The RBI has provided four months time for recovery, but we do not intend to wait that long. We will take all steps to recover dues at the earliest," he said. |
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| Rajput said, "We need Rs 3.50-4 crore to resume normal banking operations, but it all depends on the bank's chairman. If he repays the dues, the bank could restart operations. But chances for this is diminishing, as the chairman is in jail." |
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| It is worth mentioning here that membership of the bank was revoked by the Surat Bankers Clearing House on August 31, as it failed to meet the day-to-day clearing requirements. |
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| Restrictions were placed on the bank under Section 35 (A) of the Banking Regulations Act, by the RBI on September 10. Financial irregularities committed by the bank chairman Hariprasad Malpani were the main reason for the crisis in the bank. |
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| Misusing his authority, Malpani secured huge loans from the bank. He also secured temporary over draft from the bank. |
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| This money was not repaid, leading to a liquidity crunch at the bank. Malpani is in jail for over two months, in connection to a complaint of fraud lodged against him by some financiers. |
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