RBI cancels Madhavpura bank’s licence
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- Business & Industry
- Monday, 04 June 2012 23:22
- Published on Tuesday, 05 June 2012 13:23
- Hits: 1184
Gujarat Global News Network, Ahmedabad
The Reserve Bank of India cancelled the licence of Madhavpura Mercantile Cooperative Bank (MMCB) on Monday. The RBI cancelled the licence under Section 22 of the Banking Regulation Act, 1949 (AACS) as the bank failed to recover over Rs 1,100 crore.
RBI had issued a showcause notice to the board of administration of the bank in March asking why the bank's licence should not be cancelled.
“RBI has cancelled the licence of MMCB on Monday evening as we were not able to make recovery.” Total recovery pending is over Rs 1,100 crore and NPAs have touched 99.9 per cent of total deposits," admitted BKR Maruti, chief executive officer of MMCB.
The bank has to recover more than Rs 1,100 crore out of which Rs 800 crore is from Ketan Parekh and various companies of Shirish Maniar and Mukesh Babu. MMCB still owes its depositors more than Rs 700 crore, out of which more than Rs 550 crore belong to around 50 cooperative banks of the state.
The MMCB was hit by a scam in 2001, in which the MMCB management had given huge sum of unsecured advances mainly to Ketan Parekh, a share broker in Mumbai.
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