May 9, 2002 | 1340 IST
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Auditors of co-op banks pulled up in G-secs scamThe Maharashtra Co-operation Department has pulled up auditors of Osmanabad and Wardha District Central Co-operative Banks for their failure to notice discrepancies in investments in government securities even as it was awaiting a full report of the probe into gilt investments by co-operative banks. Notices have been served upon auditors of Osmanabad and Wardha Banks, which lost Rs 300 million and Rs 250 million respectively in the G-secs scam involving Home Trade and other brokers, for dereliction of their duties, the state government sources said on Wednesday. "The auditors are supposed to conduct a continuous and concurrent audit of the bank dealings and should have detected the irregularities in G-secs transactions in the normal course," sources said. Meanwhile, in a notice to Bombay Stock Exchange, Television Eighteen India Ltd said Home Trade owes Rs 17 million to various TV18 group companies and provision to that extent would be made in books of respective entities in FY 2001-02. TV18 reiterated that even though it was holding post dated cheques for a part of the above outstanding and would make every effort to recover the dues, the provisioning was being done as a measure of abundant caution and accounting practice. State government sources said in case of Nagpur DCCB, which lost Rs 1.5 billion, the board itself had delayed providing the information to its auditors. The Nagpur bank board had passed a resolution vesting all powers in chairman Sunil Kedar, a prominent Nationalist Congress Party leader from Vidarbha. Referring to Chinchwad-based Satguru Jangli Maharaj Co-operative Bank, the first urban co-operative bank against which RBI initiated action for involvement in the multi-million scam, the government sources said audit for UCBs was conducted on annual basis. The bank boards of all these four banks have been superseded and administrators appointed. On the probe of all 600 odd co-operative banks in Maharashtra, the report is expected by this week-end, sources added. The sources were of the view that if the average exposure of a co-operative bank in G-secs was pegged at Rs 30 million the total would come to Rs 20 billion and majority of the banks might not have violated RBI norms. "We may also ask co-operative banks not to go through brokers but it will take some time to opt for such a move," they said. Referring to the four banks, whose boards have been superseded and administrators appointed, the sources said the focus would be on providing liquidity to them in case they see a run on their deposits. "We may sell the securities registered in subsidiary general ledger account and also tap resources from Maharashtra State Co-operative Bank," they added. ALSO READ:
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