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17 co-op banks may have lost Rs 4 billion

Sangita Shah

The ripples of the Home Trade scam are spreading. More than 17 co-operative banks in Maharashtra and about eight in Gujarat may have lost about Rs 4 billion in dealing with the broking firm.

According to Kirit Somaiya, Bharatiya Janata Party MP and president of the Investors' Grievances Forum, the Pune-based Savai Jangli Maharaj Bank alone is feared to have lost Rs 270 million.

The banks in Gujarat include Gamdevi People's Co-operative Bank, Surat Nagrik Co-operative Bank, Surat Mahila Co-operative Bank, Karamsad Urban Co-operative Bank and Navsari Urban Co-operative Bank. The co-operative banks in Gujarat alone are feared to have lost about Rs 450 million.

An IGF delegation, led by Somaiya, on Friday lodged a formal complaint with Mumbai's director-general of police after meeting Reserve Bank of India deputy governors G Muniappan and V Kamesham.

On Tuesday, the Securities and Exchange Board of India suspended Home Trade from dealing in securities till May 10 for violating the RBI's norms in transactions with the Nagpur District Central Co-operative Bank.

According to the RBI, the investment transactions of the Nagpur bank through Home Trade appear to have been fraudulent in nature. Sebi had called for a hearing on Friday, but no one from Home Trade turned up.

Home Trade and its associate group companies, Ways India and Giltedge, were subsidiaries of Euro Asia, promoted by Sanjay Agarwal, a former Lloyds Finance executive. The two promoters of the companies were Ketan Sheth and Nandkishore Trivedi. The sources of Home Trade's funds are not known.

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