The Rupee Cooperative Bank has notified the scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) to refund account holders up to Rs 5 lakh.
The administrator of the Rupee Cooperative Bank, CA Sudhir Pandit, met Union minister for state for finance & banking Bhagwat Karad, urging him to intervene to resolve issues being faced by the bank.
According to Pandit, although 99% depositors will get a refund of their entire deposits as per the amended Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, high-value depositors with deposits of more than Rs 5 lakh will lose 65% of their deposits if the bank goes into liquidation. “A majority of these depositors are senior citizens and entire liquidity of around Rs 800 crore will be exhausted once deposits below Rs 5 lakh are fully refunded,” he explained. If the bank’s liquidity is exhausted, no other bank will come forward for a merger, he pointed out.
“A resolution plan or revival will ensure that larger depositors do not lose most of their money, because if the bank is liquidated, large depositors may collectively lose Rs 375 crore,” said Pandit.
Significantly, the Reserve Bank of India (RBI) has refused to sanction the merger of the Rupee Cooperative Bank with the Maharashtra State Cooperative Bank (MSSB). The proposal of merger with the MSCB was submitted in view of the latter’s wish to diversify into the retail business. MSCB is the apex cooperative bank that lends money mostly for agriculture and agri-businesses.
The Rupee Cooperative Bank has notified the scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) to refund account holders up to Rs 5 lakh. Rupee Cooperative Bank administrators said they will forward all claims made under the scheme to DICGC by October 15, 2021, after which approved claims will be settled by the DICGC within a period of 90 days.
“The DICGC told us to maintain expenses to run the bank for the next six months, within which hopefully there will be a resolution plan for the bank whether it is a merger with a larger bank, or its revival. We even met Union finance minister Nirmala Sitharaman,” he said.
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