Ahmedabad, May 13 (Inditop) The city’s first co-operative bank – Ahmedabad People’s Cooperative Bank – is caught in a cash crunch and will have to seek the central bank’s help to avoid closing down operations, officials said Wednesday.
The bank’s liquidity has dried up with the deposit base getting completely eroded, chairman Nayan Kumar Majmudar told reporters.
The bank, founded in 1932 with 51,635 customers and eight branches, including one in Dhandhuka town, about 100 km from here, is struggling to cope with the mounting non-performing assets (NPAs) also.
Non-repayment of loan dues worth Rs.35 crore out of a total Rs.50 crore advances by the bank over the past several years is the main reason for the mounting losses, the chairman said.
The bank will seek help from the Reserve Bank of India (RBI) to avoid closing down operations, an official told Inditop, seeking anonymity.
However, the depositors’ investments are safe as the bank has taken insurance from Deposit Insurance and Credit Guarantee Corp (DICGC), an arm of the RBI, the official said.
DICGC provides insurance protection to depositors for up to Rs.100,000.
