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On an application of the Reserve Bank of India,
the Central Government has today issued an Order of Moratorium in respect of
the Ganesh Bank of Kurundwad Ltd Registered Office: Kurundwad, Kurundwad
–416 106, Kolhapur (District), Maharashtra. The Order of Moratorium has
been passed by the Central Government in the public interest, in the interest
of depositors and the banking system.
The moratorium will be effective from the close
of business on Saturday January 7, 2006 up to and inclusive of April 6, 2006
or an earlier date if alternate arrangements are put in place. During this period,
Reserve Bank of India will consider the various options, including amalgamation
of Ganesh Bank of Kurundwad Ltd with any other bank and finalise the plans in
public interest and with a view to protecting public deposits.
During the period of Moratorium, the bank will
be permitted to make only those payments that have been specified in the Order
of Moratorium and the depositors of Ganesh Bank of Kurundwad Ltd will be permitted
to withdraw the balances from their savings bank account or current account
or any other deposit account through any of the branches of the bank subject
to a ceiling of Rs. 5000/- (Rs. Five thousand only). The customers can withdraw
up to the limit specified at any of the branches.
Established in 1920, Ganesh Bank of Kurundwad
Ltd., has its headquarters at Kurundwad, Maharashtra. Members of one family
are the major shareholders of the bank holding over 30% of the total shares
The bank has a network of 32 branches and its operations are mainly concentrated
in Sangli and Kolhapur districts of Maharashatra and Belgaum district of Karnataka.
As on March 31, 2005 the head office and 17 branches are computerised but have
no inter-connectivity. As on March 31, 2005, the bank’s deposits were at Rs.
217.43 crore and advances were Rs. 105.73 crore. Its gross non performing assets
were 18.04% while net NPA were 8.32%. The bank's networth had turned negative
to (-) Rs.3.05 crore, thereby making its Capital to Risk Weighted Asset Ratio (CRAR)
negative at (-) 5.83% as on March 31, 2005. This resulted in erosion of depositors’
money. The bank was also unable to come up with any credible plan to raise fresh
capital.
Alpana Killawala
Chief General Manager
Press Release: 2005-2006/849
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