ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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INDIA-BANGLADESH RELATIONS- River of Contention

very close to the powers that be in the present regime. They wanted to be bailed out of their difficulties. The takeover has probably relieved them of their difficulties. The principal of a certain cut-off point for deposits before nationalisation came in handy, since it had been upheld by the Supreme Court when the first round of bank nationalisation took place. But this does not mean that this cut-off point at Rs 200 crores of deposits is sacrosanct and will automatically apply to other private sector banks in due time. Meanwhile, however, the compensation to be paid for the take-over of the banks will be generous and there will also not be many changes, at least for the time being and for some time to come, in the composition of the banks' managements. The initiative, according to indications, would seem to have come from the Prime Minister for the takeover with influences exercised behind the scenes from quarters which had a close liaison with some of the managements of the taken-over banks. One of these managements is said to have ad- vanced large sums of bank money to influential parries as clean advances and did not know how to get them back. The take-over will come to the management's aid and mitigate some of its anxieties. Incidentally, it may be useful to mention that in spite of a faster rate of expansion than even the nationalised banks and their much- advertised efficiency, at least two banks in the group of six now taken over had run into a situation where their profit- ability was seriously in question. The net profit of Vijaya Bank, for instance, showed a decline from Rs 24 lakhs in 1977 to Rs 8 lakhs in 1978, even though its deposits had increased from Rs 260 crores to Rs 330 crores and credit had increased from Rs 147 crores to Rs 175 crores.

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