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Money > Business Headlines > Report April 17, 2001 |
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Two Kapol bank directors seek supersession of boardBS Banking Bureau The Madhavpura tremors are still being felt in the co-operative banking sector. The latest victim appears to be the Kapol Co-operative Bank, two of whose directors have resigned and moved the Reserve Bank of India for supersession of its board, alleging misuse of funds by the management. Himatbhai Goradia and Ashwin Bhuva, along with BJP MLA Hemendra Mehta, who is supporting them, have asked the RBI to initiate an inquiry into the alleged misuse of funds and take over the administration of the bank. "The non-performing assets of the bank are around Rs 630 million -- much more than the actual figure shown by the bank. The NPAs are unrecoverable," Mehta said. He clarified that they had no intention of taking over the bank. Kapol Bank chairman KD Vora has denied the allegations, saying that the two directors had not been attending board meetings regularly for the past several years and, technically, were disqualified as directors. "Our NPAs are pegged at only seven per cent -- around Rs 220 million," Vora said. The bank has a deposit base of Rs 2.94 billion and advances of Rs 1.91 billion, he said. Mehta however alleged that the bank had dismantled the system of clearing of advance proposals by a four-member committee and advances were now being cleared by the chairman or vice-chairman. He also alleged that Vora and vice-chairman Avinash Parekh had lent money to their friends and relatives. "I have not been lending money to any of the directors or their relatives. However, if a person known to me is found credit-worthy enough, there is no reason why the bank should not lend money to the person," Vora said. Vora is planning to file a FIR against some former directors who, he says, have been "misleading the depositors". PTI adds: Kapol bank lost deposits of about Rs 700 million within five days, according to its chairman. "The bank had deposits of Rs 3.50 billion till March 24 and after the Madhavpura expose we lost Rs 700 million in just five days between March 25 and 31," Vora told reporters in in Bombay on Monday. Bank vice-chairman Avinash Parekh said the bank had set a target to mobilise Rs 3.90 billion in deposits by end of this fiscal, "but with rumours of gross financial mismanagement like that in Madhavpura, we lost 20 per cent of our total deposits instead". Vora claimed that presently the bank's deposit base had stabilised at Rs 2.80 billion and that the depositors were coming back to its branches. Clarifying on Kapol bank's involvement in Madhavpura scam, Vora said, "As a part of normal banking operations we had lent Rs 80 million to MMCB in the form of call money and hope to soon recover the amount from the bank". YOU MAY ALSO WANT TO READ:
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