Saraswat Co-op Bank – Merger Issue – Balance Payments to the affected Depositors of SICBL

Location/place: Jaipur (Rajasthan)

Name of company/service: V.V.V. & Sons Edible Oils Ltd

I was the President of the erstwhile South Indian Co-operative Bank Investors’ Forum – now the Saraswat Co-operative Bank Investors’ Forum, after SICBL was merged with SCB on 1st Sept. 2008.

SICBL – The South Indian Co-operative Bank Ltd was an 85-year old well-run traditional Bank started in Matunga, Mumbai (at that time Bombay) – paying dividents to shareholders regularly till August 2004 when the Bank was put under Moratorium by the Regulator RBU-UBD, since the then congress politically placed Chairman, Mr. Raghavan Sarathy with his coterie of directors pushed the bank to brink of collapse within two years of their taking over the Bank by granting loans, left right and centre and to the directors themselves without any supporting guarantee papers . This suddenly led to the Bank losing on deposits to the tune of around Rs.238 crores which the shareholders realised only when the 2004 balance sheet was given to the public as late as in June 2004,

The one single largest beneficiery was Kamal Group of companies a small towing outfit with multifarious activities. Loans to the tune of around Rs.40 crores was given only to Kamal group for routing the funds to the benefit of the Directors.

The Forum fought hard for 4 years for recovering the hard earned life savings monies of the senior citizens (out of 67000 depositors almost 33000 were sr. citizens)- In the interim period there were deaths recorded of 139 senior citizen depositors depositors due to money-anxiety.

Over 4000 depositors came together to form the SICBL Forum which relentlessly kept the matter alive with the Co-operative Society Registrar, RBI main office and UBD, The Bank administration, Government and Political agencies the Civil and Crimina Courts, leading to the arrest of the Chairman and his directors accomplee and finally leading to RBI appointing two Adminsitrartorsin turn from the Co-op Society who failed to grapple the issues of recoveries and booking the culprit borrowers. The Forum then saw to it that a Professional RBI appointed Administrator was in place who to a great extent improved the Bank position during the Moratorium period from 2006 to 2008 till the RBI ordered the merger with Saraswat Bank on 1st Sept.2008.Now my question is:

1. the depositors were taken for a ride by the RBI and Saraswats by mmaking the depositors over Rs.1 lakh deposits to lose 45% of their deposits (sans interest)by initially allowing only 55% as settlement as per Merger terms.
2.At the time of Merger the Banks balances (as per books)due to improved health provided by the RBI Administrator was capable of providing upto 75%.
3/When the Forum started making noise on this, the 55% settlement was enhance bt 10% to 65%.
4. Saraswat Bank gained on a silver platter 13 running branches of SICBL with readymade depositors baseand now the Saraswat Bank due to their efficient operation are on the Profit side at the cost of the suffering 3500 odd above Rs.1.00 lakh depositors (the total of this comes to a miniscule Rs.28/29 crores as on date) which Saraswat’s can easily settle with the losing depositors but they refuse to do so on commercial grounds.
4.Kamal Group who had entered into a Consent term for repaying their 39 to 40 crores of loan amounts but they have so far not paid a dime to the kitty nor the Saraswat’s seem to to serious to recover from their legally like in the case of other deafuaulting borrowers.
5.The chairman himself, apart from facing the tortuous civil cases, is scott free with a Rs.4.00 crore flat in Prabhadevi to his credit from the Bank loot. No law is able to touch his due his political clout – he was the Pradesh Congress Presidet at the time of the Bank Collapse in 2004. – blessed by leaders like Patang Rao KJadam, Gurudas Kamat etc.
6.Is there a way out for the losing depsotiors to legally claim from Saraswats/RBI-UBD/Co-op Registrar, individually and collectively If so, what are the steps we should now take?

Any supporting papers needed to form the case can be provided by Mr. R.K. Vishwanathan or Mr. T.P. Vishwanathan – active members of the SCB Forum