In the latest round of returning money to the depositors, those who had deposits upto Rs two lakh will get their deposits back, 17 years after Rs1,200 crore scam hit depositors and bankers alike
Close to 45,000 depositors of scam-ridden erstwhile Madhavpura Mercentile Cooperative Bank (MMCB) will get their deposits back, said a statement from Gujarat Urban Cooperative Banks Federation (GUCBF). In the latest round of returning money to the depositors, those who had deposits upto Rs two lakh will get their deposits back, 17 years after Rs1,200 crore scam hit depositors and bankers alike. Sources in Urban Cooperative Banks (UCBs) in Gujarat have sought that local cooperative banks, that had lost their money in the scam, should also get their deposits back.
GUCBF, said in a statement that the announcement that depositors with deposits up to Rs two lakh will get their deposits back is as welcome gesture. "It will be a big relief for small time depositors, senior citizens and those in need of medical treatment. We welcome the move that depositors will finally get their money back," said Jyotindra Mehta, chairman of GUCBF.
Earlier, the bank had repaid to depositors with deposits up to Rs one lakh. Now the limits have been raised. Mehta further demanded that just as individual depositors are getting back their deposits, banks which had their deposits in Madhavpura Banks should also be repaid. Till now individual depositors have got back about 52 per cent of their money, while UCBs have got 28 per cent of their deposits back. The idea was that individual depositors should not lose their principal. "But after all, the money deposited by UCBs also belong to individual depositors. So just as direct individual depositors got 52 per cent of their money back, UCBs should also get 52 per cent of their deposits back," demanded Mehta. According to estimates, 281 banks had lost Rs 665 crore in the scam.
National banking watchdog The Reserve Bank of India (RBI) had cancelled banking license of MMCB in 2012. A liquidation committee had been appointed, which is trying to recover the dues from those who had taken loans from MMCB. As the loans are being recovered, the money is being returned to the depositors.
The scam had seriously dented the image of cooperative banking sector in general and it took them over a decade to bring back confidence of the depositors.
SOME RELIEF
In the latest round of returning money to the depositors, those who had deposits up to Rs 2 lakh will get their deposits back, 17 years after Rs 1,200-crore scam hit depositors and bankers alike
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