After Krushi, it is Vasundhara

Even before the dust has settled over the collapse of the Krushi Urban Cooperative Bank, comes news of the Vasundhara Cooperative Urban Bank Limited tottering on the brink of collapse.

In a virtual replay of what is unfolding at Krushi, Vasundhara's depositors have been turned away empty-handed for the last week, cheques issued by the bank have bounced and there are allegations that its board has siphoned off Rs10m.

The bank was set up three years ago with a capital of Rs4m and had 12 members on the board of directors. The deposits of the bank had grown to Rs20.5m.

An angry woman depositor reportedly walked away with the computer printer from Vasundhara's only branch after officials refused to clear her cheque. When word spread, angry depositors crowded the bank last Thursday demanding that their money be returned.

As in the case of Krushi, the bank's chairman, directors and manager have not shown up for the last one week. Incidentally, Vasundhara had figured on the list of "weak banks" that was drawn up in the aftermath of the Krushi fiasco.

It is learnt that the bank requires Rs4 million to honour immediate commitments. However, Vasundhara has only Rs1.5m with the Hyderabad District Cooperative Central Bank towards Statutory Liquidity Ratio and this money is not allowed to be withdrawn.

According to Vasundhara's Assistant Manager, M. Srinivas, the bank was in no position to pay depositors because of heavy withdrawal after the collapse of Krushi.

"We paid Rs8m in August alone and have no money left. Give us some time and we will pay back all depositors", he said. He added that efforts were underway to "mobilise" funds to pay depositors.

Sources say that rivalry between the members on the board had led to five of them being removed by the Deputy Registrar of Cooperative Societies.

A Reserve Bank of India (RBI) official said that no complaint had yet been received on the looming crisis at Vasundhara. In typical bureaucratic fashion, he said, "Once the complaint reaches us, we will initiate action."