THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI BALASAHEB VIKHE PATIL) :
(a) and (b) Reserve Bank of India (RBI) has reported that there was a rush for large
scale withdawal of deposits from the branches of Madhavpura Mercantile Cooperative Bank Ltd.
(MMCB), Ahmedabad from 9th March, 2001 in which all the 26 branches of the bank in Gujarat
and 2 branches in Mumbai were affected. Since the branches of the bank remained closed from
13th March, 2001 onwards, RBI has not been able to assess the branch-wise details of deposits
withdrawn.
(c) and (d) : The withdrawal was caused by strong rumours that the guarantee extended by
the bank to Shri Ketan Parekh, a share broker, has devolved on the bank. The large scale
withdrawal of deposits from MMCB had affected other urban cooperative banks at Ahmedabad
and other towns of Gujarat. Even though the intervention of RBI had brought the crisis under
control, the exact impact on MMCB could not be assessed due to the closing of shutters of
the bank.
(e) to (f) RBI has further reported that the bank had withdrawn an -amount of Rs. 5.25 crore
from the current account maintained by MMCB with RBI. Ahmedabad. RBI has not been able to
ascetain the purpose for which the money was withdrawn and its utilisation thereof, due
to the closure of the bank.
