HC to hear UWB depositors' petition tomorrow

Mumbai, Sep 27 (UNI) The Bombay High Court has deferred till tomorrow the hearing into a petition filed by United Western Bank (UWB) depositors who have contended that the Bank's amalgamation with the Industrial Development Bank of India (IDBI) was unwarranted and that they had been kept in the dark about the amalgamation.

The depositors have contended that the Reserve Bank of India was aware that the UWB had made losses running to almost Rs 100 crore during the last two years. The RBI today filed an affidavit before a division bench comprising justices R M S Khandeparkar and V M Kanade stating that their recommendation for the amalgamation was aimed at safeguarding the interest of the depositors.

Also, the RBI has sufficient power to issue directions to any bank in the public interest or to prevent the affairs of the bank from being conducted in a manner detrimental to the interests of the depositors or prejudicial to the bank, the RBI said.

The affidavit further submitted that despite repeated directions to UWB from February 2005, the performance of the Bank deteriorated. For the quarter ended June 30, the bank had incurred a net loss of about Rs six crore.

Adv Uday Warunjikarm, representing the depositors, contended before the court that the RBI was relying on just a few documents and reports. Actually, the market value of the bank's share was Rs 20 as against the face value of Rs 10 and over 70 per cent of the Bank's shareholders were content, he argued.

The case has also been intervened by Mr Laxman Joshi Anaji of the United Western Bank Bachao Samiti, Pune, who has alleged that the RBI had rejected the proposals of the state government, SICOM and HDFC and the conduct of the RBI indicates a pre-planned move for the amalgamation.

It maybe recalled that a moratorium has been imposed on the UWB which will be in force till December 1. A depositor can not withdraw over Rs 10,000 at any given time.

UNI ARM MAZ PM RK2100