Agashe dead; depositors now pin hopes on IOB

Agashe,who was in judicial custody on charges of embezzlement of depositors’ money,died of cardiac arrest at Sassoon Hospital on Friday. However,the demise will not delay the takeover,assured IOB chairman and managing director S A Bhat bringing relief to depositors,who had been waging a battle since September 2006,when the bank was placed under moratorium.

Bhat told The Indian Express that they got the approval from RBI in December and are set to take over the bank by March.

“I have already sent an ‘in principle’ approval to the administrator and my consultants will be readying a due diligence report by March. We should be ready to take over the assets and liabilities of the 37-year-old cooperative bank in April,” said Bhat. The proposal involves the takeover of assets and liabilities of the 37-year-old cooperative bank with deposits of more than Rs 722 crore,he said.

The bank’s accumulated losses are estimated at over Rs 350 crore. For the depositors of the Pune-based urban cooperative bank,Shri Suvarna Sahakari Bank,it will be the end of a struggle. Members Shrikant Limaye and Vilas Lenke,who along with the depositors formed the Shri Suvarna Sahakari Bank Depositors Committee that addressed the issues of the depositors,are hoping for the best. “We see a ray of hope with the IOB taking over. However we,as depositors,have not been intimated about the procedure,” said Limaye,a depositor,who,along with others,had put up a tough fight,going on to even communicating with the RBI .

RBI had put the cooperative bank under moratorium in September 2006,following huge non-performing assets (NPAs),non-recovery of loans and non-compliance with RBI guidelines in case of loan approvals worth Rs 436.74 crore.

While the bank has deposits of over Rs 700 crore,NPAs account for more than Rs 300 crore,primarily due to connected lending,said bank sources. The bank has 12 branches — nine in Pune,two in Mumbai and one in Shripur. The total employee strength is reportedly over 100.

The takeover is looked at as among the few deals between a public sector bank and a cooperative bank. In November,following a complaint by the special auditor,the chairman and several other directors of the bank were taken into legal custody following charges of financial irregularities.