No major decision was taken at the meeting convened by the Central government's department of agriculture and cooperative at New Delhi.
Depositors and Urban Cooperative Banks (UCBs) have taken the initiative to sacrifice some portion of their deposits with the Madhavpura Mercantile Cooperative Bank (MMCB) in an attempt to revive the bank which is on its death throes.
On the other hand, no major decision was taken at the meeting convened by the Central government's department of agriculture and cooperative at New Delhi on Thursday. The fate of the MMCB is likely to be decided at another meeting of the board of nominees to take place next week.
Meanwhile, the depositors and UCBs have taken the initiative to sacrifice their dues up to 50% so that the bank's negative network can turn positive and it can fulfil Reserve Bank of India's criteria for revival.
The bank currently owes around Rs617 crore to 268 UCBs in the state. "We have decided to sacrifice 50% of our dues," said Jyotindra Mehta, chairman of Gujarat Urban Cooperative Banks Federation.
Similarly, Gujarat Investors Protection Council has also written a letter to the board of nominees of the MMCB expressing their willingness to let go not more than 40% of their dues in line with the Urban Cooperative Banks' proposal.
"If the bank goes into liquidation, the investors are not likely to get anything. Moreover, the revival of MMCB will boost people's confidence in the cooperative sector," said Jitu Shah, president of Investors Protection Council.
The depositors have received 50% amount of their deposits in two instalments. However, they have not received any repayment or any interest for five years. The bank is yet to pay more than Rs100 crore plus interest to around 13,000 depositors.
If sources are to be believed, MMCB needs nearly Rs500 crore for revival. The central registrar had also asked the state government whether it was willing to lend the bank to come out of crisis.
However, the state government refused to bail out the bank.
Interestingly, neither the chairperson of the board of nominees of the MMCB Radha Singh nor the representatives of RBI were present in the meeting held at New Delhi on Thursday, said sources.
Now, the central registrar will decide the future course of action.
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