Benares State Bank in deep trouble
27 Sep 2001
Mumbai: The RBI has issued a directive under the Banking Regulation Act directing the Benares State Bank not to permit deposits in excess than Rs 1,000. This order has been passed keeping in view the fact that the bank has been posting losses during the last four years and its net worth as well as capital adequacy ratio has turned negative.
For the year ended March 2000, the bank had deposits of Rs 901.56 crore and advances of Rs 235.45 crore. The bank has over 500 branches all across India. The net non-performing assets of the bank were at 24.70 per cent and the capital adequacy ratio was negative. The figures for the financial year till March 2001 were not available.
The Maharaja of Benares once promoted the bank. In the mid-nineties, takeover tycoon P Rajarathinam acquired a significant stake in the bank and utilised the banks funds for his other mergers and acquisition ventures. This led to a significant deterioration in the banks functioning, which is now facing insolvency.
