Police action likely against Udhna bank's ex-chairman

SURAT: Four months after RBI clamped strictures on Udhna Citizens' Co-operative Bank, the administrator and his officials are likely to initiate criminal action against some of the old board members of the bank. It is also likely to begin legal action against the top 10 defaulters.
Talking to TOI, an official from the district registrar's office said, "A few days before the RBI imposed 35(A) on the bank, one employee of the bank took out nearly Rs 14 lakh under the instructions of office-bearers of the bank.As it was found that this amount was used to distribute Diwali gifts to government officers, investigations were ordered. During the investigations a diary was found giving details of spending of this money.
Now the government appointed administrator A K Padhiyar is planning to begin criminal action against the manager of the bank, chairman Setu Madhavan, vice-chairman Narendra Patel and others. A representation in this regard has been made to the police."
On the other side, following the persistent pressure of depositors, action against top 10 defaulters of the bank has been expedited.
Udhna bank has 51,339 depositors and has total assest value, including deposits, of about Rs 95 crore. But, it showed lending of Rs 68 crore and NPA ratio increased by an alarming rate in October-November, 2010. This compelled RBI to announce strictures by clamping down 35(A) on the bank. But, the bank chairman obtained a stay on the RBI order till November 18. RBI got this stay reversed before the date from the higher court. An administrator was appointed in the last week of November 20.
The depositors of the bank have got together and are fighting for the revival of the bank, but till the recovery process of the bank is complete it is unlikely that any revival formula can work.