The Hindu : Andhra Pradesh News : Vasavi Bank awaits RBI nod to pay depositors

Online edition of India's National Newspaper
Saturday, Sep 11, 2004

Andhra Pradesh

Andhra Pradesh

Vasavi Bank awaits RBI nod to pay depositors

By Our Staff Reporter

HYDERABAD, SEPT. 10. The Vasavi Cooperative Urban Bank Ltd., is hopeful of securing permission of the Reserve Bank of India (RBI) within two weeks to pay its depositors Rs. 20,000 each. The State Government has recommended the bank's case, according to the bank Chairman, P. Rajeshwar Rao, and the Managing Director, K. S. Murthy.

Delay in revival

Addressing a press conference here on Friday, they said a representation had been made to the RBI to permit payment of Rs. 20,000 to each depositor, as the bank's revival was likely to take sometime. It had pledged properties worth over Rs. 175 crores, which were involved in litigation, awaiting auction. If this could be done it would not only benefit the depositors, but also help the bank's revival and solve the staff problems. The bank was closed since March 7, 2003.

70.11 crores recovered

It had already recovered Rs. 70.11 crores of the dues totalling Rs. 120 crores, Mr. Rao stated. While dues from directors amounted to Rs. 53 crores, top borrowers owed Rs. 50 crores. Already the directors had remitted Rs. 17 crores. "We are confident of collecting dues from them as, except two or three, they are willing to pay." A former Mayor and businessmen were among the big borrowers.

Property auction

As part of its efforts to recover dues from former directors, prime property of 7,800 sq. yards at Shyamlal Building, Begumpet, worth over Rs. 22 crores would be auctioned on September 20 at the bank's head office in Malakpet. The Joint Collector, Ranga Reddy district, would supervise the auction, which has generated a lot of interest in view of the clear title and sanction of all permissions.

Replying to a question, the Chairman said the last auction could not be successful because the land was then described as Government property and a court stay could not be vacated.

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