Karnataka - Bijapur   

Bank superseded, Mohsin takes over management

Staff Correspondent

Deputy Commissioner allays fears of depositors

BIJAPUR: The Siddeshwar Urban Cooperative Bank, a financial institution that has served the region for 95 years, has been superseded following allegations of mismanagement, loss and increase in level of non-performing assets.

The governing body headed by G.M. Warad stood dissolved even as Deputy Commissioner Mohammod Mohsin, who has been appointed administrator, took over the management on Thursday. Speaking to presspersons, Mr. Mohsin said he would take steps to recover the loans.

He sought the cooperation of the public and staff to bring the bank back on track. He told the staff to discharge their duty properly, failing which they would have to face the consequences. While stating that the bank could gain its past glory with little effort, Mr. Mohsin allayed fears of depositors.

The bank posted a profit till 2002-03, and its downfall began after reckless lending that resulted in poor recovery. In 2004, the Reserve Bank of India barred the bank from giving fresh loans, and asked it to use more effective measures to recover dues. However, the management could not achieve much progress in this regard, and the level of NPA rose to 45 per cent by the end of December last year.

The bank has 23,000 members (shareholders) and deposits of Rs. 195 crore. It had lent Rs. 139.01 crore. Of the 21,205 barrowers, 7,993 have become defaulters, and Rs. 60.76 crore is overdue from them. The bank has initiated legal action .

The decision of the bank to lend Rs. 7.93 crore to 168 promoters of the Jnanayogi Shivkumar Sugars Ltd. set up by Bijapur MP Basanagouda R. Patil Yatnal and associates, at Hirebevanur village in Indi taluk, without adequate security raised many eyebrows. Of this, not a single rupee has been recovered.

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