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13.1.11

Mahila Bank staffers retrenched, payments come to a halt

Disbursement of money to depositors of the now defunct Nagpur Mahila Urban Cooperative Bank has taken a break. This happened since all employees of the bank were retrenched on December 31, 2010, the deadline set by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which was paying their salaries.

Their sacking brought the entire work of distributing the compensation amount received from the deposit insurance agency to a standstill. Even after the bank's closure, these employees had been retained in service to clear off the depositors' dues.

After the bank went into liquidation over a year ago, the DICGC has recently settled the claims for Mahila Bank, under which every depositor having funds up to Rs 1 lakh gets back the entire amount.

"We had to terminate the services of all employees as the DICGC deadline had ended, leading the distribution being held up. We are now considering re-employing some of the staffers on a honorarium, so that the work continues," said a senior official of the state's cooperation department dealing with the bank's affairs. It is expected that the work of disbursing money will resume from Monday.

The terms of employment and salaries to be paid to the employees in their fresh tenure have not been decided yet. The expenses will now have to be borne by the bank itself, sources added.

The forms submitted by depositors for claiming refunds are being processed in alphabetical order. Out of over 54,000 depositors, only around 8,000 forms have been received so far. The bank has paid back Rs 13.5 crore as refunds and another Rs 33.5 crore remains to be paid.

However, almost 35,000 depositors have less than Rs 1,000 in their accounts. There are only 1,500 who had over a lakh deposited in the bank. It is expected that those having meagre amounts of Rs 100 or so will not apply at all, said a source.

Meanwhile, the cooperation department has sent a proposal to the state government for granting Rs 13 crore for 11 beleaguered cooperative societies in Nagpur. This demand is on the basis of a notification issued last year, which sanctioned Rs 200 crore for 468 societies throughout the state. The amount was to be disbursed as an interest-free loan for a year, to be used to refund deposits up to Rs 10,000 for each account. The first list had two cooperative banks from Nagpur, but 11 more went into the red later. The department here has demanded that the facility should be extended to all the 11 societies, said a source in the department.

However, an inordinate delay in the reply is discouraging the officials here, as it has been more than seven months since there was a response from the Mumbai headquarters on this topic.
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