Rs 19.5 cr for part repayment of Karuvannur Bank depositors held up

Irinjalakuda: The depositors left high and dry in the Karuvannur Cooperative Bank scam is still awaiting the repayment of their investments.

About Rs 19.5 crore which the Cooperative Department claimed will be utilised for part repayment of the depositors of the Irinjalakuda-based bank has not been disbursed so far.

Kerala Bank has amassed the funds through deposits from cooperative societies in Trichur district. However, no agreement has been signed between the societies and the Kerala Bank.

The bank authorities clarified that the delay is because of the wait to complete the technical proceedings of the same after which the funds would be available next week.

Those duped by the scam-hit bank are mostly labourers and they are now desperately seeking their hard-earned money back.

The Government had informed the High Court that 10 per cent of the mature deposits and 50 per cent of the interest would be settled after two weeks.

The bank had put forth this suggestion as all deposits cannot be returned in one go.

Earlier, there were complaints that the Bank is distributing the repayment amounts received in a partisan manner.

The Court has specifically directed the distribution of funds in a fair and just manner to all depositors.

Complying with this, the Bank decided to return one part of all the deposits which have completed the maturity period along with the interest.

Meanwhile, sources say, the Government notification on forming a consortium to aid the Bank would be issued within two days. Authorities including the bank administrator are in Thiruvananthapuram regarding this. Many banks in Thrissur istrict are ready to offer funds to the consortium. However, these can be received only after the Government issues the order.

The scam
Last year, the bank's CPM-led governing council was sacked and it was placed under the watch of an administrator as the fraud came to light.

Before that, several borrowers received recovery notices for amounts greater than they had borrowed. The borrowers approached the Registrar of Cooperatives and a probe unearthed a multi-crore scam.

The irregularities at the bank are pegged at Rs 300 crore, but the government estimates it to be only Rs 150 crore.