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Scam-hit Madhavpura Mercantile Co-op Bank's fate hangs in balance

The uncertainty about the future of Ahmedabad scam hit Madhavpura Mercantile Cooperative Bank (MMCB) Ltd as the term of its board of directors is in effect ending August 23. Much will depend on the position taken by the central government on suggestions for restructuring corporate debt made by the bankers for its rebirth.

A delegation of the banking industry met Union Agriculture Secretary PK Basu and other officials in New Delhi last week to propose ways for the revival of the Bank and give him yet another chance to avoid cancellation the banking license.

Jyotindra Mehta, president of the Gujarat Urban Cooperative Banks Federation (GUCBF), part of the delegation is confident that the suggestions accepted. He said that the dissolution or cancellation of banking license at this time will not help the Bank or to serve the interests of its depositors. "Instead, it will only help the culprits responsible for its liquidity crisis," Mehta said Sunday.

"The central register of cooperatives has no power in this case, either to stop or restart the current board.Only the Reserve Bank of India may take a decision on whether to appoint an administrator or extend the term of the current board of directors or let his license revoked, "he said.

He said that as part of the recovery strategy, urban cooperative banks that have their money stuck in MMCB offered to waive half of the amount that the Bank needs to them, which he said would be a considerable sacrifice to help significantly reduce the liability. "Similarly, 13,000 applicants have also offered to waive their claim to 35 percent of their deposits, if it leads to the continuation of the investment bank," said Michel.

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Scam-hit Madhavpura Mercantile Co-op Bank's fate hangs in balance

“The Central Registrar of Cooperatives has no power in this case either to discontinue or revive the present board. Only the Reserve Bank of India can take a decision on whether to appoint an administrator or extend term of the present board of



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