On behalf of Mumbai-based industrial house Indage Group, investment banking firm Prime Securities has approached the Reserve Bank of India (RBI) with a proposal to invest around Rs 150 crore in the equity of Surat-based Gujarat Industrial Co-operative Bank (GICB) that had been identified by the regulator as a bank having minimal liquidity status due to massive non-performing assets on its balance sheet. Thus, under Section 35-A, the RBI had directed GICB on September 20, to disallow depositors to withdraw over Rs 1,000 till further notice.
Vijay Shah, joint managing director, GICB, said, ?Along with Prime Securities chairman Arun Shah, I met RBI senior official Mohanti on September 22, with a request to speed up decision on Prime?s investment proposal. This will help GICB ease liquidity with funds infusion from Indage Group?s 20,000 shareholders. Prime Securities had already submitted a detailed proposal in this regard on June 13.?
Following the regulator?s latest directive, thousands of GICB account holders flocked to the bank?s main branch in Surat on September 22 to withdraw their savings. To avoid any unruly situation at the bank premises, the police was called.
GICB currently has 20 branches in Gujarat and has over 1.5 lakh account holders across the country.
The bank currently has Rs 458 crore deposits and Rs 252 crore advances. Also, it owns Rs 14 crore worth assets and has got net reserves of Rs 152 crore. GICB?s current investment in government securities stands at Rs 64 crore.