Meanwhile, the Reserve Bank of India has temporarily suspended the membership of the Madhavpura Bank for a period of one week from March 13, 2001 The paralysis of the clearing house activities followed the RBI's unprecedented move of invoking rule eleven against the beleaguered bank. The apex bank has invoked rule eleven in view of the acute liquidity crunch which the bank has been facing over the past couple of days on account of large scale panic withdrawal of deposits.

According to Reserve Bank of India chief general manager VS Das, "The bank has no cash money to repay depositors." It is believed that the bank is poised to dishonour cheques amounting to a whopping Rs 45 crore in Ahmedabad and other Rs 65 crore in Mumbai as pay order and instrument worth these amount, issued on Monday. In view of this grave development and fearing large-scale depositerier, all 24 branches of crisis-ridden, Madhavpura Bank remain closed on Tuesday. Furthermore, even as top officials of the crisis-ridden Ahmedabad-based Madhavpura Mercantile Cooperative Bank are trying to play down the bank's alleged role in the country's worst ever Sensex crash, directors of the bank themselves are arm-twisting the bank to cough up payments for their personal investments.

It is reliably learnt, from the market sources, that at an early morning meeting of the Madhavpura Bank's top brass here on Tuesday, incensed directors of the bank demanded that their own personal deposits be safeguarded pending which they would not open their branches. It is also understood that the directors were agitated at the manner in which funds of the bank had been allegedly misused by the top brass for their own personal gains.

Ironically, the Reserve Bank of India was till Monday taking the stand that, the interest of investors would be protected at all costs. "Repayment of depositors' payments is our top priority," a top RBI official had told The Financial Express on Monday though in the same breath he had also warned of an imminent liquidity crisis in case provisions had to be made to cough up the total deposits of Madhavpura Bank amounting to Rs 1,220 crore which are currently spread over its 22 branches. In view of this, the RBI has already sought the assistance of the more than 20 leading cooperative banks in the state to lend all possible support to the bank to enable it to honour its payment obligations towards depositors and investors. On Tuesday, however, the RBI mentioned that no more fund is available from other co-operative banks.

Interestingly, the regional office of the RBI here has been pleading ignorance of the beleaguered bank's exposures to the stock brokers on the ground that the bank has not furbished this information to them. The apex bank is apparently also unaware of any alleged diversion of funds by the Madhavpura Bank chairman Ramesh Nandlal Parekh.

One questioned on what prima facie evidence revealed, Mr Das was tight-lipped, taking recourse to the official line that "Investigations are going on. We have submitted a report to our central office and waiting for directions."