RBI supersedes HP co-op bank board
By Our Banking Bureau | 04 Nov 2004
Shimla: Alarmed at the growing non-performing assets (NPAs) of a co-operative bank in Himachal Pradesh, the Reserve Bank of India (RBI) has superseded the board of directors and have appointed an administrator. This has set panic amongst depositors.
Reports say that officials have been directed to seal the accounts of all defaulters and guarantors of the Urban Co-operative Bank, Mandi. There are around 5,000 depositors and 2,600 shareholders of the bank, located in Mandi, some 160 km from Shimla
Established in 1960, the bank is reported to have deposits worth Rs38 crore. It has extended loans of over Rs22 crore. Because of rising defaulters, the bank has accumulated NPAs worth Rs6.5 crore.
The bank's chairman M P Saigal, currently under suspension, said, "All deposits are safe with the bank and financial institutions. The RBI has appointed an administrator to recover bad loans and to keep a check on NPAs. We will co-operate with the administrator appointed by RBI to run the affairs of the bank."