Updated: June 8, 2021 8:01:07 am
The Reserve Bank of India (RBI) has appointed an administrator for Seva Vikas Cooperative Bank, Pimpri, which faces allegations of fraudulent transactions and misuse of public money. Ganesh Agarwal is the administrator.
So far, the police have arrested four directors of the bank who are lodged in Yerawada jail after being remanded to judicial custody.
“The RBI has superseded the board of directors and appointed an administrator,” said bank chairman Vijay Ramchandani. “There is no direction regarding limitations on the withdrawal of money by depositors,” he added.
The bank has 25 branches and over one lakh depositors.
Shrichand Aswani, who played a part in exposing the alleged fraudulent dealings of the bank, said, “Our team led by Dhanraj Aswani exposed the frauds of the bank. The loan fraud was the biggest one committed by the directors of the bank. For instance, a Rs 6 crore loan was shown as given to a person who did not exist. The amount was misappropriated.”
Aswani said the auditors appointed by the cooperatives department had pointed out fraud to the tune of Rs 500 crore. Sources said the bank had Rs 823 crore of deposits in 2018 and by March 31, 2021, the deposits had crashed to Rs 409 crore. The cooperatives commissioner had ordered an audit of all the loan accounts following allegations of fraud.
The RBI, in a letter to the bank, said, “As can be seen from the financial position of the bank from March 31, 2018 to March 31, 2021, percentage of gross and net NPA and CD Ratio are at alarmingly high level. Further, the bank itself had reported losses for two years consecutively i.e. for financial position as on March 31, 2020 and March 31, 2021. The net worth of the bank had declined sharply from Rs 88.50 crore as on March 31, 2018 to Rs 50.28 crore as on March 31, 2021. There had been fast and continuous depletion in deposits of the bank and it indicated loss of customers’ confidence in the affairs of the bank.”
“It is evident that the present management has clearly failed in discharging its responsibilities and was conducting the bank’s business in a manner detrimental to the interests of the bank’s present and future depositors. In these circumstances, I am satisfied that this is a case of failure of management at the board level and that for preventing the affairs of the bank from being conducted in a manner detrimental to the interest of its depositors and to secure proper management of the bank, it is necessary to supersede the Board of Directors of the bank,” said RBI executive director Shirish Murmu.
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