Berhampur: The co-operative department has taken initiatives to expedite the process of paying depositors money of the liquidated co-operative banks in the state.

"I have started the process from Chatrapur Co-operative Bank in Ganjam district," said co-operation minister Surya Narayan Patro. "We are trying to instil confidence in the public towards the co-operative banks through these efforts."

Patro paid cheques amounting Rs 35,84,070 to 59 depositors (each having deposit of less than Rs 1 lakh) of the bank on Sunday. He said: "A total of 400 depositors have submitted their documents, and we will pay Rs 1.03 crore in phases."

He said there were 600 defaulters of the bank, and the government would collect Rs 2 crore from them. "We will initiate action against the staff members involved in irregularities in loan sanction. We will take action against the defaulters and erring employees," he said.

The first signs of trouble at the bank were noticed at the time of the statutory inspection with reference to its financial position as on March 31, 2003.

The RBI had advised the bank not to accept fresh deposits and grant fresh loans or advances. The statutory inspection revealed that the bank had violated the RBI's direction by accepting fresh deposits.