Madhavpura Mercantile Co-operative Bank needs only Rs400 cr for revival

The Madhavpura Mercantile Co-operative Bank (MMCB), which had been rendered comatose by the shady dealings of Ketan Parekh, may soon show signs of recovery.

The bank requires a revival dose of merely Rs400 crore and the bank’s board, chaired by a retired IAS officer, Radha Singh, is pressuring the finance ministry at the Centre to inject the required amount.

“Neither banks nor financial institutions want to invest in the crisis-ridden co-operative bank,” said a source apprised of the developments. “But with just Rs400 crore, the bank can be revived.” The source said that when the bank recovers, lakhs of people in rural areas who hold accounts with 268 connected banks will benefit.

The bank has not initiated the liquidation process so far because the future of the 268 co-operative banks depends on it, sources said. “The MMCB is supposed to pay Rs665 crore to these 268 banks,” the source said. “If the bank sinks, it will pull down the other banks which have the money of lakhs of people of Gujarat.” 

The MMCB already has a fund of Rs250 crore, and by injecting another Rs400 crore, it will be able to repay some amount to the other co-operative banks, and thus to the account holders.