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CBI charges MMCB officials with multi-billion fraud

The Central Bureau of Investigation has registered a case of misappropriation of funds to the tune of Rs 8 billion against top functionaries of the Madhavpura Mercantile Co-operative Bank charging them with indulging in unauthorised activities, flouting directives of the Reserve Bank of India and causing loss to the bank.

Agency sources said the bank's former chairman Rameshchandra Nandlal Parikh, managing director Devendra Pandya and the bank's Mandvi (in Bombay) branch manager Jagdish Bhogilal Pandya have been accused of criminal breach of trust.

The agency in its FIR, which was lodged after the Gujarat high court directed CBI to probe all transactions of the bank, has alleged that the three officials conducted the banking business in violation of RBI's directive and lent money to their favoured companies.

The FIR said the three officials had allegedly violated the RBI directive to maintain credit deposit ratio, which is normally 65 per cent.

According to the investigations, the credit ratio to deposit was showing a steady increase from October 2000 (86.5 per cent) to March 16, 2001 when the ratio touched 131.5 per cent.

The FIR alleged that these accused in collusion with each other, intentionally made advances to 19 parties including companies of big bull Ketan Parekh to the tune of Rs 10.30 billion as against permissible limit of Rs 4.75 billion.

The CBI further alleged in the FIR that part of the advanced amounts were transferred to the companies in which Rameshchandra Parikh was directly or indirectly interested.

"Rameshchandra Parikh misused the status of chairman and ordered Jagidsh Pandya to make illegal and unauthorised advances in aforesaid accounts beyond the sanctioned limit," the FIR said.

The CBI said that "thousands of depositors invested their hard-earned money in form of deposits with the bank but the accused officials did not manage the funds properly.

"It is further submitted that this bank is second largest scheduled bank in the state (Gujarat) and these accused caused heavy economic burden upon the bank which resulted into non payment to the depositors and the non-working of the bank," the FIR alleged.

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