EXPRESS NEWS SERVICE

AHMEDABAD, SEPTEMBER 18: THE beleaguered Madhavpura Mercantile Cooperative Bank (MMCB) reopened today after a six month hiatus to find depositors eager to get their money back queuing outside all of its 28 branches.

The MMCB, the second largest cooperative bank in Gujarat lost around Rs 1,200 crore in the stock market due to fraud and misappropriation of its funds by the stock-broker Ketan Parekh and others. With mounting public pressure, the state government provided financial assistance for a bail out and a revival package was chalked out.

After the finalisation of the package the Agriculture and Cooperative Department of the Central Government issued a notification on August 24 in this regard. However, because of the announcement of two by-elections in Gujarat (scheduled to be held on September 20), the implementation of the plan was held up until the Election Commission gave its nod a few days back.

Initially, the MMCB would begin by paying Rs. 5,000 to its depositors and settle claims of upto Rs. one lakh only. In March, the bank had given Rs. 1,000 each to its depositors before downing its shutters due to paucity of funds. Gujarat cooperative minister Ramanlal Vora recently informed the state Assembly that the MMCB’s total outstanding liabilities are Rs 1,687 crore.

MMCB needed Rs 1,264 crore to resume its normal banking operations, he said. Of the required Rs 1,264 crore, Rs 464 crore would come from the Deposit Insurance and Credit Guarantee Corporation and remaining Rs 800 crore from state cooperative banks against guarantees by the Central and state governments.