In the age of NiMo and PNB, meet co-op bank that holds back customer's gold for 1-rupee default

Last Updated: Wed, Jul 04, 2018 13:44 hrs
Kancheepuram Central Co-operative Bank

Officials from the Pallavaram branch of the Kancheepuram Central Co-operative bank (KCCB) must be feeling a proud lot.

In a period when most nationalized, state-run and public banks have been crying of being looted by shady cronies masquerading as entrepreneurs, the KCC bank has stuck to its credit policies to the T.

A Nirav Modi, leaving the country had Punjab National Bank's entire management and workforce spending sleepless nights. But KCC bank's officials, in stark contrast, may not have to. This, considering the bank follows its policies and systems to perfection.

Several employees from PNB got grilled by sleuths after "the" one man, a Nirav Modi left without paying nearly Rs 13,000 crores. And here is a co-operative bank from Kancheepuram, that has managed to latch onto customer's precious jewelry. The customer in this case defaulted on one rupee.

C Kumar, a customer of the bank had been a regular one, at least seven years to be precise.

Unlike Nirav Modi and his absconding uncle Mehul Choksi, Kumar claims that he wants to pay the bank's arrears of one rupee and take back his gold ornaments, pledged for the Gold loan.

He says that he has been ready to pay that one rupee for the past five years, but bank authorities have refused to give back his jewelry. The bank is neither interested to accept the default amount of one rupee.

Kumar flummoxed by the bank's attitude in these five years, has mustered courage to file for a writ petition.

A customer of the bank's Pallavaram branch, Kumar has had at least three Gold loan transactions with the bank, if one were to go with a ToI report. He pledged 31 grams of gold jewelry on April 6 2010 for a loan of 1.23 lakh. On March 28 2011 he says he settled that loan amount along with the interest payable. But the bank's internal records revealed one rupee as pending.

He sought a fresh loan of Rs 1.05 lakhs by pledging 85 grams on February 9 2011 and three weeks later an additional Rs 60,000 grams by depositing 53 grams of Gold.

Kumar's statements suggest he had deposited a total of 169 grams for a loan of Rs 2.85 lakhs. The Gold jewelry that he deposited itself would have been valued at Rs 5.10 lakhs (at Rs 3020 per gram) going by current market estimates.

The bank, Kumar claims, did not close his accounts after closure of the first transaction. Having spent five years running from pillar to post without any solution, he believes a legal resolution could only help him get his jewelry back.

His counsel, M Sathyan was quoted by various news reports confirming the incident. Another reason for filing a writ petition was to ensure the safety of his jewelry.

A hearing of the case took place on Friday, and Justice T Raja has sought for the government advocate to get instructions in two weeks from the concerned authorities.

The bank is yet to share its version of the story.

Strangely, nine months ago, another case related to Gold had hit Kancheepuram.

It was workers from Krizz Gold jewelry protesting after its CEO and MD was found wanted in the Kanishk Gold scam case.