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Friday, Aug 03, 2007
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Congress MP’s charge: Margadarsi denies taking deposits

Special correspondent

HYDERABAD: Congress MP V. Arunkumar has alleged that Margadarsi Financiers had committed fresh irregularities and asked why the Reserve Bank had not pressed action against the company despite the availability of evidence.

Addressing a press conference here on Thursday, he said the website of Margadarsi Financiers, updated on July 17, unambiguously stated that the firm continued to invite deposits.

The MP released copies of a letter he had written to RBI Governor Y.V. Reddy, asking why action was not initiated against Margadarsi Financiers for collecting deposits. Quoting from a letter written by the RBI to the Union Finance Ministry on November 30, 2006, he said the apex bank had knowledge that Margadarsi had violated the provisions of the RBI Act.

The letter said: “It was confirmed in March 2006 that the branches of Margadarsi Chits (Karnataka) are advising the members to invest the matured value as deposits in their sister concern Margadarsi Financiers which was located in Hyderabad.”

However, the bank was informed by Margadarsi that it had discontinued the acceptance of deposits from June 2006.

But, the updated website of the firm clearly stated that “future liability amount can be deposited in Margadarsi Financiers.”

It was evident that the RBI was not keen on initiating action, he alleged.

Margadarsi Financiers, when contacted, said that it had not accepted any deposit since November 20, 2006. A spokesman said the website referred to by the MP was designed in 2004 but subsequently not much attention was paid to it. The company would take steps to rectify the site, he added.

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