May 15, 2002 | 1335 IST
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Money > Business Headlines > Report May 15, 2002 | 1335 IST |
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Home Trade-Bengal co-op links in focusKausik Datta The Reserve Bank of India on Tuesday initiated examination of a handful of urban co-operative banks on their reported involvement with the tainted stock brokerages, Home Trade and GiltEdge. This follows reports that these broking firms had been doing business with some banks in West Bengal as well. The brokerages have messed up over Rs 4 billion of some Maharashtra-based co-operative banks and a provident fund. Top sources in RBI confirmed that officials of the apex bank have initiated inquiry into some cooperative banks for their alleged involvement with Sanjay Agarwal, owner of Home Trade. The official, however, declined to divulge any further details. A spokesperson of West Bengal Urban Co-operative Federation, apex association of the cooperative banks, said the list of the banks facing RBI inquiry today include co-operative banks at Contai, Nabapally, Baidyabati, Boral, Bhatpara-Naihati and Sheoraphuli. He said the apex bank, prima facie, did not find any wrongdoing on the part of the management of these banks. "The bank chairmen, who were contacted by the RBI officials, claimed that they had no involvement with Sanjay Agarwal," he added. The West Bengal co-operation minister on Monday had alleged misappropriation of funds in at least four co-operative banks to the tune of Rs 160 million. Market sources said the developments did not rule out the possibility of Home Trade mopping up funds from the state. Agarwal's possible links with the Bengal co-operative banks gained ground following news that he had requested a top executive of the state's registrar of cooperative societies to promote his firms in West Bengal. Being a Calcutta boy, Agarwal has been maintaining very cordial relationship with a handful of city brokers. He might have persuaded the management of some banks to invest in the government securities through Home Trade. Experts said if any bank was found to be involved in the gilts scam this time, it would mean doom for them. Unlike the Mumbai-based big ticket co-operative banks, most of the Bengal banks were in very bad financial shape and would not be able to sustain any further loss. Powered by ALSO READ:
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