Rbi Probing Shree Laxmi Co-Op Books

A team of Reserve Bank of India (RBI) officials today visited the head office of the Ahmedabad-based Shree Laxmi Co-operative Bank Ltd (SLCB) and began scrutinising its books of accounts.

However, refusing to disclose the result of the scrutiny, an RBI official said that it was done with a view to find out the exact cause for the bank declaring an indefinite closure of all its five branches with effect from October 8.

Meanwhile, SLCB chairman Dinesh Dani has written to the RBI seeking the central bank's assistance for reviving his bank. Though, the chairman has maintained that SLCB closure is due to the indefinite strike called by its staff union, the employees of the bank said that they had never consented for an indefinite strike.

 

Admitting that there has been a wage freeze in his bank for the last few years, an SLBC employee said, "We would never go on an indefinite strike as we already know that being a weak bank our management will not accede to our demands for wage revision."

In the letter to RBI, the bank chairman has also admitted that his bank took a major hit in March and April because of the Madhavpura Mercantile Co-operative Bank fiasco because fearing closure of SLBC, most of its depositors made a run for their money and its deposits declined drastically.

To add to the panic withdrawals, a substantial portion of its total advances of Rs 20 crore is learnt to have become non-performing assets. Moreover, the bank is learnt to have posted a loss of Rs 7.45 crore during the year ended March 31, 2001.

RBI regional director (Gujarat) told Business Standard that since SLBC has paid premium on its deposits to DICGC, those with deposits of Rs 1 lakh need to worry because even in the extreme case they would get their money back as their deposits is insured.