The fraud was discovered following the release of the audit report for 1995-96, and has now invited action from the State Cooperatives' Department as well as the Reserve Bank of India (RBI).

Established in 1939 and with 12 branches and 7,303 members in Nashik, the bank was defrauded by various methods including furnishing of bogus names and papers for loans for various schemes.

Among the depositors defrauded are hawkers, shopkeepers and housewives, who at regular intervals gave the bank's agents a portion of their money to be deposited in a small savings scheme.

However, instead of depositing the money so collected, the agents merely pocketed the collection. When the depositors approached the bank at the conclusion of the financial year in April, they were told that there was nomoney to pay them. After persistent efforts and pleas to return their money, hundreds of depositors ransacked the head-office at Bohorpatti, Ravivar Karanja on May 21. The manager and staff fled after seeing the infuriated depositors. The bank also promised to return their money on May 25 and then on May 30 but went back on its word.

The then directors and staff not only siphoned off money but also went on a recruitment drive, employing their family members and relatives. The then chief accountant and eight directors also helped themselves to the depositors' funds. Eight staff members, who had misused money, were suspended but reinstated after they returned the money.

Subsequently, District Deputy Registrar Manohar Tribhuvan issued a show cause notice to the bank, while the RBI has sought information on its financial affairs. The board of directors is facing dissolution and the bank is on the verge of being delicensed.

The bank's incumbent chairperson, Laxman Gangurde, says criminal proceedings will beinitiated against the erring directors, staff and agents, adding that several measures are being taken to economise, like a blanket curtailment in salaries up to 30 per cent, sacking 21 staffers and stopping allowances. The move would save up to Rs 3 lakh on establishment expenses, he explains.

Meanwhile, the bank's plea to the District Central Cooperative Bank for a loan to return money of the yearly small saving depositors has been turned down. The teachers' bank holds a share of Rs 36 lakh with the district bank but has already taken a Rs 3.5-crore loan in the past.

DEMOLITION DRIVE: In an unprecedented demolition drive, the Nashik Municipal Corporation razed over 50 unauthorised structure along the Old Agra Road. The demolition drive led by deputy Municipal Commissioner D P Parde bulldozed unauthorised stalls, shops, walls and extensions on the pavements with two bulldozers and 75 workers. The illegal extensions of Hotel Mazda, Hotel Sandeep, Hotel Samrat, the compound wall of Janalaxmi Bankand Kondaji Chivda were demolished.

The demolition drive has come close on the heels of the NMC's general body meeting which was adjourned to condemn Municipal Commissioner K P Bakshi for his nonchalant attitude towards the city's woes. The meeting had also witnessed unruly scenes on June 11. With corporators, cutting across party lines criticising the commissioner for the state for affairs in the city. Mayor Ashok Dive had adjourned the meeting without allowing Bakshi to make a statement in the House.

According to Parade, the demolition drive would continue for a week and unauthorised structures would be demolished, irrespective of who owned them.

The demolition drive has, however, annoyed some corporators. Like former Standing Committee chairman and a corporator of the Congress party Uttamrao Kamble, who said that some of the demolished structures had been regularised by the NMC in 1968. He also criticised the administration for demolishing structures without issuing notices.

ABOUT 500 COURTARREST: About 500 Congress party workers courted arrested in the Malegaon town on Saturday, to protest against the `anti-farmer' policies of the Manohar Joshi government. The agitation was undertaken by former minister Dr Baliram Hirey, notwithstanding the last minute withdrawal of the stir by the Maharashtra Pradesh Congress Committee.

The Congress workers assembled at the Shivaji statue and marched in a procession to the Mosamb Road via Hedgewar Marg, Ambedkar Road, Mahatma Phule Road.