Tuesday, 6 December 2005

Charminar Bank Scam: Recovery at snail's pace

2005
By Syed Akbar
Hyderabad, Dec 6: With the recovery from major defaulters going at a snail's pace, the scam-hit Charminar Bank may not be able to honour the State government's commitment of returning money to depositors from March next year.
The bank had refunded money to customers with deposits up to Rs 1 lakh after the State government worked out a revival scheme in association with the Reserve Bank of India. The State government and the RBI fixed a time schedule for refund of deposits over Rs 1 lakh in instalments starting from March 2006.
Though the first instalment is due in the next three months, the Charminar Bank has failed to speed up the recovery process to meet the deadline. The authorities are yet to recover more than Rs 200 crore from top 25 defaulters even two years after the revival plan scheme into effect.
In the initial stages, the CID could recover about Rs 100 crore from some of the defaulters but half of the amount went into the kitty of the Deposits Insurance Credit Guarantee Corporation as part of the revival scheme. The bank was left with Rs 50 crore and of this Rs 23 crore was disbursed among depositors with deposits up to Rs 1 lakh. It is mandatory on the part of the Charminar Bank management to deposit half of the recovered amount with the DICGC and disburse the remaining half among depositors.
The bank has to pay Rs 266.9 crore to depositors but is now left with just Rs 27 crore.
"Unless the authorities speed up the recovery we will not get our money back. The bank may manage to pay the first instalment in March but the problem becomes compounded when the second instalment becomes due in September," NRI depositors Association president Mohiuddin A Taher told this correspondent.

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