Depositors lose Rs 200 cr in Gujarat

Depositors lose Rs 200 cr in Gujarat

MUMBAI, MAR 21: An action forum of co-operative banks depositors formed in Ahmedabad has said that depositors in these bank have lost nearly Rs 200 crore as a result of the interest lost on pre-mature withdrawal of deposits.

Said the Cooperative Bank's Depositors Action Forum: "The loss of principal amount of deposits is certain in the wake of the payment crises occurred due to reckless price manipulation of select K-10 scrip in the share markets, and as extended to the Madhavpura Mercantile Cooperative Bank (MMCB)... the top management of MMCB along with BSE share broker, Ketan Parekh, has been involved in the price manipulation of select scrips. As the prices of these shares nose dived, the chairman of MMCB and his accomplices have illegally applied the funds of the bank to the detriment of its own depositors".

The forum said that for the past one week or so, MMCB had failed its obligation to repay depositors and has closed its shutter for more than three days in contravention of various provisions of banking laws and Reserve Bank Of India Act (1934).

"The management of MMCB went underground, shaking the confidence of depositors of all co-operative banks in Ahemedabad leaving the anxious depositors queueing up at almost every co-operative bank in the city", said the Forum.

The Forum is of the view that the failure of MMCB will certainly cause a payment crisis on the Ahmedabad Stock Exchange (ASE) very soon even as it cited a relationship between broker, Ketan Parekh, and the chairman of the MMCB, Ramesh Nandlal Parikh.

It said that Madhur Capitol and Finstock Ltd, (MCFL) owned controlled by Ramesh Parikh's son has a membership of the NSE and ASE. "They have a business relationship with Ketan Parekh... Ramesh Parikh has facilitated Ketan Parekh with a bank guarantee of Rs 200 crore, and as Ketan Parekh has been affected by the payment crises in the stock market, MMCB is required to pay up for the said guarantees and may thus have to go into liquidation", claimed the Forum.