MUMBAI, May 26: The scam-tainted Abhyudaya Cooperative Bank Ltd has appealed to the depositors not to go in for panic withdrawals, even as the Cooperative Bank Employees' Union has accused the police of not taking timely action to nab the culprits.

The bank published an advertisement on May 25 criticising the adverse press coverage and assuring its depositors about the safety of their money.General manager of the bank, Rajeev D Gangal, told Express Newsline today that the bank enjoyed a very strong financial position and ``there was absolutely no reason for the investors to worry.''

``The rate of withdrawals since the last week has gone up substantially, but more importantly, we have been able to meet the customers' requirements without any ureasonable delay,'' Gangal pointed out.

Gangal said as on March 31, 1997, the bank had deposits to the tune of Rs 785 crore which increased by Rs 118 crore in the last year itself. While the bank maintained a working capital of Rs 950 crore, it made a profit of Rs 31 crore in 1996-97. ``We also have Rs 460 crore invested in various state and central agencies and with the Maharashtra State Cooperative Bank and also have a cash reserve ratio of Rs 48 crore with the RBI,'' Gangal said.

``These figures prove that the bank's long term and short term liquidity is very solid and not a single depositor with us will lose any money irrespective of the final outcome of the scam,'' Gangal said confidently.

Incidentally, the bank also got a shot in the arm with the Union also reassuring the customers that their investments were safe. Shiv Sena MP and president of the Cooperative Bank Employees' Union, Anand Adsul, has promised to stand by the depositors. ``Considering the strong financial position of the bank, all the depositors will be repaid to the last penny, if at all the need arose,'' Adsul said in a press conference on Monday.

However, he lambasted the police for not taking timely action against the culprits although the matter was brought to light on several occasions in the past.

Ironically, neither Gangal nor Adsul have commented on the Non-Profit Assets (bad debts) of the bank, a key factor in deciding the bank's financial status. The Reserve Bank of India had recently made certain changes in the provisioning requirement against bad loans of all commercial banks and cooperative banks.

The co-operative sector which had been out of the provisioning requirement for several years were brought under the NPA classification requirement due to the abnormal increase in bad debts as a result of political interference and mismanagement of funds. RBI sources say that the NPA of several cooperative banks will be several times higher than the figure shown in the balance sheet.

The Economic Offences Wing of the Mumbai police has already arrested 10 directors and some top-officials of the bank following a complaint received from Prakash Deshmukh, a shareholder of the bank.

Deshmukh in his complaint made on November 18, 1996, had alleged that Gandhat, in collusion with other directors and senior bank officials had misappropriated funds to the tune of Rs 4,68,50,000 in the purchase of several bank properties in the city.

He alleged that these officials had intentionally paid higher price for the properties at Andheri, Kandivali and Worli by manipulating the accounts and construction rates. Gandhat's bail application was rejected by additional sessions judge Shipra Basu on Saturday, but restrained the police from arresting him till May 28, the time given to Gandhat for moving the high court in the matter.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.