The fate of thousands of small-time investors and savings bank
account holders is uncertain as the Indian banking regulators started
tightening its noose around minority cooperative society Amanath Bank.
Now, the bank is staring a possible suspension of its licence by Reserve Bank of India (RBI) in the face.
Amidst the allegations is Union Minister for Minority Affairs K Rahman Khan, who was one of the founders of the bank, also served as its president when irregularities allegedly took place.
Khan and his associates are alleged to have siphoned off over `110 crore from the bank on the pretext of giving loans to close relatives of the minister. Sources told Express that the bank gave away loans to Khan’s relatives, but they were not recovered.
“Many of them did not pay interest and the board approved closing the loans with a fraction of payment. This resulted in enormous non-performing assets (NPA),” they said. However, Khan admitted that loans were given to his relatives, who defaulted, but he stopped short of taking responsibility for it.
“There are no loans pending from my side. As per co-operative regulations, directors and relatives can take loans... My relatives have taken loans because they are shareholders of the bank and have the right to borrow,” Khan told Express.
“I have not given any concessions, they were given by subsequent boards as part of recovery process. (State Minorities Commission Chairman Anwar) Manpaddy and others are complicating the situation unnecessarily,” he said.
The RBI which is said to have taken note of the ‘dubious’ transactions over a period of time had shut down operations of the bank, allowing only `1,000 transaction per account for a period of six months.
Unaware of this development, small investors and customers are now making frequent trips to the bank to see if they have access to their savings of many years. Sources said the bank had provided insurance of up to `1 lakh and any one with savings more than that amount was likely to be affected if the RBI decided to shut operations.
Amjad Khan, who runs a military equipment store in Shivaji Nagar, says, “We (neighbours) all have invested in the bank and run our families with the interest amount. Now we hear it will be merged and that this crisis is politically motivated, but what about the normal people like us?” The bank’s NPA is said to be around 3 per cent now, but sources said this was fabricated to mislead the RBI and the investors.
news from : www.newindianexpress.com
Now, the bank is staring a possible suspension of its licence by Reserve Bank of India (RBI) in the face.
Amidst the allegations is Union Minister for Minority Affairs K Rahman Khan, who was one of the founders of the bank, also served as its president when irregularities allegedly took place.
Khan and his associates are alleged to have siphoned off over `110 crore from the bank on the pretext of giving loans to close relatives of the minister. Sources told Express that the bank gave away loans to Khan’s relatives, but they were not recovered.
“Many of them did not pay interest and the board approved closing the loans with a fraction of payment. This resulted in enormous non-performing assets (NPA),” they said. However, Khan admitted that loans were given to his relatives, who defaulted, but he stopped short of taking responsibility for it.
“There are no loans pending from my side. As per co-operative regulations, directors and relatives can take loans... My relatives have taken loans because they are shareholders of the bank and have the right to borrow,” Khan told Express.
“I have not given any concessions, they were given by subsequent boards as part of recovery process. (State Minorities Commission Chairman Anwar) Manpaddy and others are complicating the situation unnecessarily,” he said.
The RBI which is said to have taken note of the ‘dubious’ transactions over a period of time had shut down operations of the bank, allowing only `1,000 transaction per account for a period of six months.
Unaware of this development, small investors and customers are now making frequent trips to the bank to see if they have access to their savings of many years. Sources said the bank had provided insurance of up to `1 lakh and any one with savings more than that amount was likely to be affected if the RBI decided to shut operations.
Amjad Khan, who runs a military equipment store in Shivaji Nagar, says, “We (neighbours) all have invested in the bank and run our families with the interest amount. Now we hear it will be merged and that this crisis is politically motivated, but what about the normal people like us?” The bank’s NPA is said to be around 3 per cent now, but sources said this was fabricated to mislead the RBI and the investors.
news from : www.newindianexpress.com
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