The Gujarat government has decided to wind up nine of the 18 sick co-operative banks involved in the multi-crore co-operative bank scam and repay around Rs 870 crore (Rs 8.70 billion) to 900,000 small investors in next 60 days.

"In coming two months, we will repay Rs 870 crore to the 900,000 harassed small investors who have lost their savings in the co-operative banks scam. The government has also decided to wind up nine such banks," Gujarat chief minister Narendra Modi said, addressing the Confederation of Indian Industries in Mumbai on Saturday.

He said it was wrong to consider Gujarat was a scam-tainted state as merely one per cent of the total co-operative banks were involved in the scam.

"We have also decided that from now onwards 15 per cent of co-op bank's profits would be kept aside as a reserve fund to be used when need arises," Modi said.

He said his government had set up fast track courts to try the guilty, adding: "No one shall be spared."

Modi listed out his government's strategy for sustained economic development and growth of five sectors of education, water, power, human resources and security.

"I want to make a small change... I want to convert red tapism into red carpet... There will be so much of transparency that you will be able to view the status of your file even on the Internet," he said.