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May 11, 2002 | 1115 IST
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CBI may probe gilts scam

BS Banking Bureau

The Central Bureau of Investigation is likely to probe the government securities scam, which has engulfed several co-operative banks in Maharashtra and Gujarat, as well as the Seamens' provident fund.

The failure of two more co-operative banks, Suvarnayug Sahkari Bank, Pune, and Satara Merchant's Co-operative Bank, to secure physical delivery of gilts has also come to light.

The state co-operative department will be issuing a notice to Suvarnayug Bank because it failed to secure physical delivery of government securities worth Rs 55 million.

The Satara Merchants Bank also does not have physical possession of securities amounting to Rs 5.7 million.

Ratnakar Gaikwad, commissioner of co-operatives, said Suvarnayug Bank would be issued a notice under Section 78 of the Co-operative Act, while another would be served under Section 88 for the recovery of property from its directors.

The department is planning to lodge a complaint to the police against the bank, the second in Pune after Sadguru Janglee Maharaj Co-operative Bank lost Rs 260 million in the gilts scam.

"With the Seamens' Provident Fund now a casualty in the gilts scam, the case has assumed a national dimension. A CBI probe is required. There could be more provident funds involved in the scam," said a state government official.

The Seamens' PF has lost Rs 920 million in the scam due to the non-delivery of government securities and public sector bonds by brokers. The fund has around 27,000 members, and a corpus of over Rs 4 billion.

Meanwhile, the Investors' Grievance Forum, will be meeting state chief secretary V Rangathan at Mantralaya on Tuesday to take stock of the situation arising out of the scam.

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