GSSIC closure a major blow toco-op banks

GANDHINAGAR, NOV 15: As many as 40 co-operative banks of the state face the prospect of losing about Rs 30 crore they had invested in the...

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GANDHINAGAR, NOV 15: As many as 40 co-operative banks of the state face the prospect of losing about Rs 30 crore they had invested in the non-convertible bonds issued by the government-owned Gujarat State Small-scale Industries Corporation (GSSIC), which is being wound up.

The government’s recent decision to close down the loss-making GSSIC has reportedly created panic among those managing the banks’ affairs, forcing them to make a strong representation to the government to ensure that the amount invested in the bonds is returned.

But Principal Secretary (Finance) K V Bhanujan told The Indian Express, “The Government can’t afford to extend financial assistance to any of its loss-making corporations. In fact, the government has already initiated a process of closing down the GSSIC by offering the voluntary retirement scheme (VRS) to its employees. The corporation has incurred losses of about Rs 70 crore”.

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On the fate of the banks’ money stuck in the corporation’s non-convertible bonds, Bhanujan onlysaid, “I can’t comment further on the issue as the matter is sub-judice, with the co-operative banks having already approached the court in this regard”.

In their desperate bid to get back their money, the managements of the aggrieved banks have formed an organisation called “Sahakar Bharati” to fight their case.