General Cooperative
bank chairman Hasmukh Shah, who is believed to have extended
loans of Rs 79 crore to a coterie of 10 groups in which
he and other directors of the bank have personal interests,
has resigned.
The failure of some of the groups to repay the loans in
time created the crisis in the bank, which had extended
advances of Rs 130 crore as against the total deposit
of just Rs 115 crore with the bank. The Reserve Bank of
India (RBI), which admitted that the bank is not maintaining
the credit-deposit ratio since November, has suspended
General Cooperative and the Anand-based Charottar Cooperative
banks from the clearing-house.
Ahmedabad District Cooperative Bank extended a loan of
Rs 5 crore to General Cooperative to pay up to Rs 5,000
to each of the withdrawal-seekers, but with the state
apex cooperative organisation, the Gujarat State Cooperative
Bank Federation, refusing to clear the promised Rs 5 crore
loan to the bank, it was forced to down the shutters.