Suvarna Sahakari Bank placed under moratorium

Pune, Sept 15 | Updated: Sep 16 2006, 05:30am hrs
The Cosmos Banks plans to acquire the Shree Suvarna Sahakari Bank has hit a roadblock with the Reserve Bank placing the Suvarna Sahakari Bank under moratorium. Cooperatives commissioner Anil Diggikar said an administrator had been appointed on the bank under Section 110 A(3) of the Cooperative Act. The Suvarna Sahakari board has been dismissed and day-to-day functioning will continue under the administrator.

Diggikar said Cosmos would now have to approach the department with a fresh proposal. Withdrawals of only Rs 1,000 from savings bank accounts is being allowed.

The cooperatives commissioner had put Shree Suvarna Bank under the microscope for the last four months as it was headed towards insolvency. The cooperative bank had been dominated by Dynaneshwar Agashe who was its chairman for many years. Agashe was also president the Maharashtra Cricket Association for 15 years and was vice-president of the BCCI. Agashe was ousted from the MCA and had passed on the baton to his son, Ashutosh Agashe recently.

The technology for Shree Suvarna Sahakari Bank came from EBZ online, a firm promoted by Mandar Agashe, another son of Dnyaneshwar Agashe and was backed by the Agashe family business enterprise, the Brihans Group.

The UWB moratorium had already triggered off withdrawals from Shree Suvarna Sahakar bank to the tune of Rs 20 crore, Ashutosh Aghashe, chairman, Suvarna Sahakari Bank had told FE. The subsequent announcement of the proposed merger with Cosmos led to large scale panic withdrawals by Suvarna customers.