Sri Guru Raghavendra Sahakara Bank blames 62 dud loans worth Rs300 crore for crisis
Assuring depositors that their money was "100 per cent safe" with the bank, Sri Guru Raghavendra Sahakara Bank Chairman K. Ramakrishna, here on Monday, said 62 loans had locked up Rs 300 crore of deposit.
 
"Your money is 100 per cent safe with Sri Guru Raghavendra Sahakara Bank. It's my responsibility," Ramakrishna said at Sri Guru Narasimha Kalyanamandira auditorium, to assure depositors.
 
Because of these 62 dud loans, the Reserve Bank of India (RBI) had restricted the lender from executing business, he said amid shouting by depositors.
 
To assuage customers, the call to an assistant commissioner of police by Bengaluru South MP Tejaswi Surya -- not present -- was relayed on loudspeaker live and the MP claimed that he had spoken to Finance Minister Nirmala Sitharaman to help the customers.
 
Ramakrishna said he would meet customers again on January 19 with all the details and numbers.
 
Dramatic scenes and pandemonium ruled the auditorium before his arrival. Thousands of bank customers threatened to go en masse to the police station and file a case against Ramakrishna.
 
As he addressed the gathering in Kannada, hundreds of depositors shouted back at him seeking clarifications.
 
"The bank is saying I can't withdraw more than Rs 35,000. In case of our fixed deposit maturing, we will have to renew it as we can't encash it, " said Nagaraj M, 49, who has been dealing with the bank for the past six years.
 
At the auditorium, thousands of depositors earlier demanded the bank chairman's presence to clarify the matter.
 
The lender had invited depositors to the auditorium at 6 p.m. to update them on the bank's status, following a RBI directive restricting the bank from doing business with immediate effect.
 
"We want the bank's directors here," shouted a depositor from the stage. A handful of policemen were trying to control the crowd and bring order to the assembly.
 
Many elderly and retired persons had arrived to know the fate of their savings. Several women were also present at the meeting.
 
"It was a good bank with only 0.5 per cent NPAs. Now we can't trust any bank. See what happened with the PMC Bank," said another customer.
 
Shankar Sharma, 38, an employee of a private company, said majority of depositors were senior citizens and retirees. "I don't have an account with the bank, but my mother, uncle, aunt have deposited money in it. I came for them, " said Sharma.
 
He said many of the bank's 35,000 clientele deposited more than Rs 5 lakh, which had total deposits of Rs 1,600 crore. The bank started operations in 1999.
 
Ramakrishna was escorted away to safety by the police after his speech even as the depositors were screaming and agitating for justice.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    User

    COMMENTS

    Ramesh Poapt

    2 weeks ago

    the sector was ripe for reforms since too long. in due course,
    it will have stricter regulations shortly from RBI which may prevent
    such cases. it has started already.

    shadi katyal

    2 weeks ago

    We were under the misleading impression that Modi sarkar has taken steps after looting of banks by Modi Jewelry and others but it seems he is too busy to pass CAA and NRC and let the economy go to dogs as we see bank after bank

    B Ravi

    2 weeks ago

    Once you have gone under RBI regulation means common people savings,FDs and other deposits which are bove 1 lac will be received is doubtful. Its a game played by RBI. RBI Now will just issue validity qutrly.

    Rajolu Ramam

    2 weeks ago

    PMC bank, now GURU RAGHAVENDRA SAHKARKRI BANK and tomorrow many more urban banks Cooperative banks are going to be " PHUT". The en tire system is totally fraudulent. Where the system is failing?
    RBI and the GOI MF has to seriously ponder over the debacle.
    CURRPTION IS OUR CULTURE.
    Unless severe punishment to the perpetrators quickly awarded, the entire financial will collapse which cannot be revived.

    ICICI Bank moves HC seeking recovery of bonuses from Kochhar
    ICICI Bank has approached the Bombay High Court seeking recovery of bonuses earned by its ousted CEO Chanda Kochhar.
     
    In an affidavit filed by the bank at the high court on Monday, the bank said, "Respondent (ICICI Bank) has filed Suit (L) No. 32 of 2020 at the Court inter alia seeking recovery of amounts towards the clawback of bonuses given to the petitioner from April 2006 to March 2018, pursuant to the termination of the petitioner's (Kochhar) services." 
     
    Clawback is an act of retrieving money already paid out. The former CEO is accused of violation of bank's code of conduct and conflict of interest in the controversial Rs 3,250 crore loan given to Videocon Group, a part of which went to a company run by her husband Deepak Kochhar.
     
    The affidavit also observed that Chanda Kochhar is currently being interrogated by several agencies, including the CBI and the Enforcement Directorate (ED), and said that her petition challenging her sacking claiming violation of RBI rules is an malafide attempt to secure stock options of the bank. 
     
    In January last year, the Justice Srikrishna Committee indicted her for violation of bank's code of conduct and conflict of interest. It cleared the decks for investigating agencies and overarching regulatory bodies to take appropriate action against all the accused. 
     
    The former ICICI Bank chief had moved the Bombay HC challenging the bank's decision to terminate her in November 30, 2019, after the bank approved her request for early retirement. 
     
    ICICI Bank's board had also decided to take back all the bonuses and stock options paid to her between April 2009 and March 2018.
     
    In another development, the ED on Friday said that it has provisionally attached Rs 78.15 crore worth movable and immovable assets in possession of Kochhar, her husband Deepak Kochhar and the companies owned and controlled by him.
     
    According to the ED, the asset attachment is under the Prevention of Money Laundering Act 2002 (PMLA) in the ICICI Bank loan case.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    Meenal Mamdani

    2 weeks ago

    What a downfall!!
    Last year while Arun Jaitley was in US for medical treatment, he had scolded the ED for questioning Ms Kochhar, saying they should not sully the reputation of respected individuals unless they had overwhelming proof of wrongdoing.
    At that time people wondered if Kochhar was being protected by BJP. Looks like poor Jaitley had been duped by Ms Kochhar's air of injured innocence.
    Now justice is being done.
    What makes rich individuals risk all for getting a little more rich? Rajat Gupta too lost his reputation for a not that large a sum.
    I guess we will never know unless the individuals write a mea culpa autobiography while in prison.

    REPLY

    Newme

    In Reply to Meenal Mamdani 2 weeks ago

    They were caught in small sum cases. They were involved in larger scandals also but they were not caught in it.

    IFIN recovers Rs 1,379 cr loan; gross NPA at 97%
    Crisis-hit IL&FS Financial Services (IFIN) has recovered around Rs 1,379.9 crore, including loans provided and investments made in third party borrowers and to IL&FS Group companies as of November 30.
     
    Post the recovery, IFIN has a cash balance of Rs 1,450 crore which inlcudes and its gross non-performing asset (NPA) by the end of November standing at 97 per cent, according to a recent affidavit filed by the Ministry Corporate Affairs (MCA) at the the National Company Law Appellate Tribunal (NCLAT).
     
    The MCA has submitted the fresh affidavit in the company law tribunal representing the new IL&FS Board which took over the group in 2018.
     
    Out of the total recovery, around Rs 1,309.9 crore came from around 30 third party borrowers, it said.
     
    "IFIN has been able to recover monies aggregating to Rs 13.1 billion from third party borrowers comprising recovery of Rs 10.5 billion under the credit exposure (including interest) and Rs 2.6 billion under the investment exposure," the affidavit said.
     
    "The cash balance as on November 30, 2019 stood at Rs 14.5 billion (including other income and net of operating expenses) vis a vis opening balance of Rs 2.37 billion."
     
    Further, it also mentioned that IFIN has entered into resolution with five third party borrowers wherein the entire principal outstanding of Rs 6,100 crore would be repaid along with the applicable interest. Of the Rs 6,100 crore an amount of Rs 1,300 crore towards principal along with applicable interest has been recovered as on November 30, 2019 and an amount ot Rs 4,800 crore along with applicable interest is expected to be recovered in future, it said.
     
    The principal amount owed by third party borrowers to IFIN as of October 1, 2018 stood at Rs 8,356 crore.
     
    As of November-end, IFIN initiated a total of 117 recovery actions against third party borrowers including 49 complaints and petitions against 14 parties under Section 138 of the Negotiable Instruments Act, 1881 and 27 recovery suits against 15 borrowers, among others.
     
    In the revised affidavit, the Corporate Affairs Ministry has also urged the NCLAT to approve the revised formula for sharing resolution proceeds from the disposal of bankrupt IL&FS group firms among its creditors in a fair and equitable manner.
     
    The revised mechanism would provide for the distribution of residual proceeds over and above liquidation value of assets to other than secured creditors.
     
    The IL&FS Group and its subsidiary companies, which have about Rs 91,000 crore in debt, is in the bankruptcy court following its defaults in 2018 that shook the entire financial sector of the country and triggered the NBFC liquidity crisis.
     
    During the period July 2018 to September 2018, two of its subsidiaries reported having trouble in paying back loans and inter-corporate deposits to lenders. This was followed by multiple subsidiaries defaulting and the group heading to bankruptcy.
     
    In its 32nd Annual General Meeting (AGM) on December 31, Uday Kotak, the Chairman of the restructured IL&FS Board had said that the ongoing resolution process of the debt-ridden group is a "test case" for group-wide resolution of stressed assets in the country adding that the board expects to recover 50 per cent of the overall outstanding debt in its books as on September 30, 2018.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    Ramesh Poapt

    2 weeks ago

    saga needs to end now!

    We are listening!

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