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Naidu seeks intervention of finance minister, RBI governor

Andhra Pradesh Chief Minister N Chandrababu Naidu on Thursday sought intervention of Union Finance Minister Yashwant Sinha and RBI Governor Bimal Jalan to protect the interest of depositors of urban co-operative banks in the wake of financial scandal involving the Krushi Co-operative Urban Bank.

In separate letters to Sinha and Jalan, the chief minister called for solving the problem of 'duality of control' over co-operative banks and taking remedial measures in the case of weak and defaulting banks.

Referring to the 'disturbing instances of financial mismanagement' by Krushi Bank, Naidu brought to the notice of finance minister that 'firm and deterrent action' was not taken by RBI officials though Krushi Bank was indulging in irregularities and was unable to refund the deposits.

"As a result of this, the bank seems to be facing liquidation causing great financial loss to the depositors. The case has also generated lot of resentment against RBI and state government," Naidu said in his letter to Sinha.

Stating that there was a duality of control over co-operative banks by RBI and Registrar of Co-operative Societies, Naidu wanted the Centre to find a solution to overcome this problem.

In a letter to Jalan, he called for a closer co-ordination between RCS and RBI and wanted the apex bank to take a lead in formulating corrective action for a more stringent and effective supervision over co-operative banks.

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