The Reserve Bank of India has directed Hyderabad-based Vasavi Co-operative Bank not to accept fresh deposits from the public owing to liquidity crisis, faced by the entity, even as the state government has appointed a cooperative joint Registrar to oversee its functioning. The action against the bank came after the State Government and RBI had just revived the crisis-hit Charminar Cooperative Urban Bank (CCUB).“RBI has also restricted withdrawals per deposit to a maximum of Rs 1,000 as the bank was facing severe liquidity problems,” officials said. As on March 2001, the bank had deposits on Rs 270 crore and reserves of Rs 30 crore. The Andhra Government’s decision to appoint a cooperative joint registrar in Vasavi Bank follows complaints of irregular and unsecured financing, resulting in defaulting payments of depositors as well as other customers.Sources said most of the board directors of Vasavi had resigned on Thursday and the bank was now run by a committee consisting of an IAS officer, a joint registrar of co-operatives and a senior retired banker. When contacted, the bank’s officiating MD refused to divulge the nature of crisis and said transactions had been “slow” due to some minor routine financial problems and “there is absolutely no need of any panic”. The bank has been going slow over the banking operations during the last few days.
