Special Correspondent

Rs. 50,000 to be paid to depositors with deposits of up to Rs. 1 lakh from December 1

HYDERABAD: Depositors of the Prudential Urban Cooperative Bank with deposits of up to Rs. 1 lakh will be paid Rs. 50,000 from December1 as part of a one-time settlement. This will benefit 1.11 lakh out of 1.60 lakh depositors of the bank.

Announcing this at a press conference here on Saturday, Cooperation Minister K. Lakshminarayana, however, ruled out any scope for revival of Prudential Bank which was liquidated in 2004.

Gold loans

The Minister said the RBI had relaxed a specific rule to allow the Vasavi Bank to extend gold loans. The bank had recovered Rs. 103 crores since 2003 and cleared the amounts due to 53,537 out of its 64,847 total depositors. Stating that its position was good, he said there was scope for its revival.

Mr. Lakshminarayana said a proposal was being sent to the RBI to allow a payment of Rs. 50,000 each to the depositors of Charminar Bank with deposits ranging from Rs. 1 to 1.5 lakhs and Rs. 3 lakhs to those whose deposits were above Rs. 5 lakhs.

He said those with deposits up to Rs. 1 lakh had already been paid the amounts earlier.

The Minister said a sum of Rs. 7.46 crores was available with Krushi Bank after it was liquidated. The Government had come across certain facts which made one infer that the Krushi Bank had kept Rs. 2,400 crores with Margadarsi and not merely Rs. 600 crores as widely believed earlier.

Entire amount

The Prudential Bank Depositors' Association, Twin Cities branch, in a statement issued here on Saturday by K. Srinivasulu, president, urged the bank to pay the depositors their entire amount, as it had recoverable assets worth Rs. 633 crores, whereas the payments to be made to the depositors was only Rs. 380 crores. As of today, it had Rs.150 crores and the difference payable to the depositors was only Rs. 230 crores.

Mr. Srinivasulu wanted the bank to recover amounts from the big borrowers, as it was holding "tangible securities, backed by collateral securities".