No incident has shaken the investors’ confidence in urban cooperative banks so much as fraud in Madhavpura Mercantile Cooperative Bank of Gujarat. The Ex- CEO of the bank Devendra Pandya has moved bail application in session court which would come for hearing on January 11.
The Special Duty officer of Bank has said that we would oppose his bail application in the session court. His bail application has been earlier rejected by the Gujarat High Court and Supreme Court of India.
Madhavpura melt down has long shadow till date on UCBs as it the Bank where middle class depositors lost money at the hand of CEO s who gave away loans to family and friends without bothering for rules and regulation. It was a loot, plain and simple.
The bank happens to fall into Gandhi Nagar constituency and Lal Krishna Advani used to be Home Minister at the time of the melt down. Amit Shah, the jailed former Home Minister of Gujarat used to be the legislature of the area.
It was the herculean effort on the part of the famous icons of the time that the situation could be somewhat saved. It is reliably learnt that Finance Minister Yashwant Sinha was cajoled by Advani to save the situation as rampaging depositors threatened to wash away all the political good-will of Advani and BJP.
Between 1987 and 2001 CEO Pandya had misused his position, violated RBI rules and had intentionally given away crores in loans to son, daughter-in-law, brothers, nephews and relatives without any security deposit, mortgage or documents. The bank went into liquidation due to these loans.
The hearing of the bail application will be held on January 11 in the court of additional sessions judge V C Barot. Pandya is in Sabarmati prison for giving loans to his family members and relatives without adequate security.
