May 9, 2002 | 1140 IST
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Home Trade burns Rs 780-million hole in 7 Gujarat banksJoydeep Ray Unearthed in Maharashtra, the gilt scam has travelled across to Gujarat. At least seven co-operative banks in Gujarat have burnt holes in their balance sheet as brokers did not deliver the securities after taking the money. The total amount involved could be about Rs 780 million. Banking experts said the amount might go up further. The broker involved in the deals is Home Trade. The affected banks have formally lodged complaints with the National Stock Exchange and Securities and Exchange Board of India alleging that Home Trade could not deliver them the securities. The list of banks which have lost money includes the Valsad People's Co-operative Bank Ltd Rs 270 million, Surat Mahila Co-operative Bank Rs 80 million, Surat Nagrik Sahakari Bank Rs 150 million, Navsari People's Co-operative Bank Rs 170 million, Gamdevi Co-operative Bank Rs 21 million, Adajan Co-operative Bank about Rs 30 million and Karamsad Co-operative Bank Ltd Rs 50 million. These banks, like the Nagpur District Central Co-operative Bank, have not received the delivery of the government securities after making payment for it. The bank managements are washing off their hands saying that they had dealt with the approved brokers and did not anticipate the trouble. Meanwhile, depositors have started running to their banks every day for last three-four days asking the management about fate of their money kept in the bank. Some of the banks which have received post-dated cheques from Home Trade (to be encashed in June) have been waiting anxiously for the day to come when they can deposit the cheques to get their money back. Officials of the Reserve Bank of India confirmed that they have already initiated investigation in the matter. "We have been carrying out a detail probe in the matter and it has revealed that no less than Rs 600 million has been lost of these banks. Further investigations are on and disclosure of any information at this stage will affect our probe," said a source in RBI here. However, the regional director of the RBI, V S Das, refused to comment. The chairman of Surat Nagrik Sahakari Bank Ltd, Bansilal Phundewala, said on April 30, the bank received two post-dated cheques from Home Trade worth Rs 150 million dated June 14 and June 21. "In our deal with the company, the conditions include this provision that they might issue us PDCs in case of a crisis. We sent a notice to them saying that if the cheques are not honoured by their banker, we will go to the court," Bansilal said. The chief executive officer of Surat Mahila Co-operative Bank, Pratibha Patchigar, said: "Why blame us? We had deals with an approved company and thus committed no mistake on our part. We have already lodged a complaint with the National Stock Exchange and the Securities and Exchange Board of India and other concerned bodies." Sources in the state co-operative department said though every bank dealing in government securities should trade through a constituent subsidiary general ledger account, some of these affected banks did trade in physical form. Powered by ALSO READ:
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