KOCHI: Kerala High Court on Tuesday directed the Karuvannur Service Co-operative bank authorities not to return deposits for the time being to the customers. The court said this is for the purpose of arriving at a reasonable prioritisation of repayment to the depositors. This will not, however, prevent the bank from making part payments in case of utmost necessity and this should be reported so that the court will also know whether the bank is doing it in the right way.
The government informed the court that the total fixed deposits amount to `284 crore, of which FDs for `142.7 crore have become matured as of July 31, 2022.The bank informed the court that it has only a balance of `60 lakh in its coffers. The court asked it to produce the audit report so as to know whether there should be an independent audit of the bank’s accounts.
Justice T R Ravi issued the interim order while allowing a batch of petitions filed by the depositors of the bank seeking to return their deposits.When the case came up for hearing, the state government said at present, the matured deposits are returned on a priority basis. Then the court asked, “How will you fix the priority?” The government replied that the priority is fixing based on the needs including medical purposes. However, the court said it is not fair fixing a priority in this manner.
The state government also informed the court that 217 Asset Reconstruction Company or bad assets amounting to `62.58 crore are pending and execution petitions in Asset Requests (ARs) which have already been completed are 702 for an amount of `110 crore in total. The bank has received requests for refund of fixed deposits totalling `30 crore.
The court asked what activities are now taking place in the bank. To this, the government pleader said at present, no fresh loans are being granted and only the amounts that are recovered from loans are being used for part payment of amounts due to depositors. The payments are being made on a token basis and not under any scheme that has been prepared. The government pleader also said the bank has sufficient assets in the form of immovable properties. The court posted the hearing of the case on August 10.