Bob Says Benaras Bank Net Worth Is Npa Provision

The Bank of Baroda (BoB), in a notice to its members, depositors and creditors on the draft scheme of amalgamation of Benares State Bank Ltd (BSB), has said that on a prescribed date, the entire amount of the paid-up capital and reserves of BSB shall be treated as provision for bad and doubtful debts.

Further, BoB shall call upon every person, who on the prescribed date was registered as the holder of a deferred share in BSB, to pay within three months from such date or dates as may be specified, the uncalled amount remaining unpaid by him in respect of such shares and the calls in arrears.

 

The scheme states that BoB shall have the option of integrating BSB's branches according its (BoB's) convenience and/or close down or shift them. Further, all employees of BSB shall continue in service and will be deemed to have been appointed by the BoB at the same remuneration and on the same terms and conditions of service, as were applicable to such employees immedialtely before the close of business on January 22, 2002.

As per the scheme, which has was forwarded by the RBI to BoB on January 25, as far as the transfer of business, properties, assets and liabilities are concerned, from the "prescribed date" all liabilities, duties and obligations of the BSB shall be and shall become the liabilities, duties and obligations of the BoB.

"If on the prescribed date any suit, appeal or other legal proceedings of whatever nature by or against the BSB is pending, the same shall not abate, or be discontinued or be in any way prejudicially affected, but shall, subject to the other provisions of the scheme, be prosecuted and enforced by or against the BoB," the scheme stated.

The books of the BSB shall be closed and balanced and the balance sheet prepared in the first instance as at the close of business on January 22, 2002 and thereafter as at the close of business on the date immediately preceding the prescribed date. The balance sheet shall be got audited and certified by a CA firm approved by the Reserve Bank of India.

As per the scheme BoB shall, in consultation with BSB, value the assets and determine the liabilities of BSB. BoB shall, on the prescribed date, open an account styled as "asset account". The aggregate amount representing the value of the assets determined as readily realisable assets shall be credited to this account.

Liabilities, for the purpose of this scheme, shall include all contingent liabilities which the BoB may reasonably be expected or required to meet out of its own resources on or after the prescribed date.