The Hindu Business Line : Shree Suvarna depositors seek concrete solutions

The bank offered its 2.16 lakh depositors a sum of Rs 2,000 in instalments as and when convenient, starting from August, Mr Mukund Ghaisas, Administrator of the Shree Suvarna Sahakari Bank, announced in a meeting attended by depositors and media.

The action committee formed by the depositors and account holders is of the view that it would be better for the bank to look at concrete options such as merger rather than ‘doling out alms’.

On the status of the bank, Mr Mukund noted that since the Reserve Bank of India (RBI) froze the accounts in September last year, about Rs 120 crore has been recovered. He, however, pointed out that a considerable amount from this had gone towards paying interests.

Commenting on the merger option that had been recommended by the depositors, Mr Mukund noted that such a moves would take some time.

NPA loss

He pointed that due to the NPA (non performing assets), loss was on the higher side, and even the strongest bank would think before coming up with an offer for merger.

According to RBI norms, he noted that the net NPA (of both the banks) should be less than 10 per cent. And it is also stipulatory that the bank which comes ahead with the merger option would have to give an undertaking that it would return the deposits, Mr Mukund pointed out.

“We have turned the corner and now onwards, recovery of any NPA will only result in reduction of the accrued losses,” he said.

Status review

He, however, noted that by December 2007, the status of the bank would be reviewed again and further steps would be taken.

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