Hyderabad, June 16: Wondering how a bank could buy and sell land like a real estate dealer, justice Goda Raghuram of the A P High Court on Monday said he would a issue notice to the RBI asking it to explain how such things were being allowed ignoring the Banking Regulation Act barring banks from engaging in other activities.
The judge was dealing with a plea of the Mega City Cooperative Urban Bank Ltd, which wanted its name to be entered into the revenue records of Qutbullapur mandal in Ranga Reddy district as the owner of a 3.5-acre piece of land. The bank, according to its counsel M Rama Rao, purchased this land through a sale agreement from some private individuals. However, some other individuals claimed the ownership of this land and challenged the decision of the mandal revenue officer who recognised the bank as the owner.
When the fact that the bank was under liquidation was brought to the notice of the court, the judge said in that case the directors of the bank should be prosecuted. Blaming the bank for doing things that bring bad name to the urban banks, the judge described the bank as the `terminal cancer of cooperative urban banks’.
Terming sale of the same land to many individuals as an evil prevalent more in Ranga Reddy district, the judge called for more facts and other relevant records and posted the matter to Tuesday for further hearing.
–Agencies–