Plea in Madras HC against REPCO bank officials

Chennai, Aug 23 (PTI) The Madras High Court today issuednotice to the Reserve Bank of India and the REPCO bank on apetition seeking to restrain the latter from admitting nominalmembers and consequently accepting any deposits from them inviolation of the RBI norms. Justice N Kirubakaran before whom the writ petition byone L Prakash, Class A Share holder of REPCO bank, came up,issued notice to RBI, Mumbai, the REPCO Bank Chairman and theJoint Secretary-cum-Registrar of Cooperative Societies, NewDelhi, returnable in four weeks. The petitioner submitted that there was no limit on thecontributions that can be received from nominal members ofREPCO bank, and as on date, its by-laws provide for acceptanceof deposits from nominal members and public without anyverification. The bank had accepted deposits over and beyond its paid upcapital, when it is legally not competent to receive anydeposits, the petitioner alleged. He also claimed that REPCO had not only permitted theadmission of nominal members as against the regulations andguidelines of RBI but has also extended loans and creditfacilities to such members, thus affecting the interest ofClass A share holders. Alleging that authorities in Tamil Nadu, entrusted withthe regulation of multi-state cooperative societies havemiserably failed to discharge their duties, the petitionersaid, "A bare perusal of the representation of REPCO wouldclearly indicate that the deposits received by it are inexcess of Rs 500 crore." He then prayed the court to restrain the bank fromadmitting nominal members and consequently accepting anydeposits from them. The petitioner also sought a direction to the JointSecretary-cum-Central Registrar of Cooperative Societies,Government of India and RBI to take necessary action againstthe erring officers of REPCO bank. PTI CORR ROH BNSCMAV