Follow Us:
Sunday, April 05, 2020

Maharashtra State Cooperative Bank submits merger proposal with Rupee Bank to RBI

A board of administrators headed by chartered accountant Sudhir Pandit was looking into the affairs of the bank with RBI extending the banking licence intervals. In the latest of such extensions, the Rupee Bank’s licence was extended up to February 20.

By: Express News Service | Pune | Published: January 23, 2020 9:24:36 am
Rupee Bank, Rupee Bank Pune, Pune Rupee Bank, Pune Rupee Bank merger with RBI, Rupee Bank merger with RBI, RBI, Reserve Bank of India, Business news, Indian Express Mounting bad debt of the Rupee Bank had led RBI to put severe sanctions on the bank while superseding the erstwhile board of directors in 2013. (Representational Image)

THE APEX cooperative bank in the state — the Maharashtra State Cooperative (MSC) Bank — has submitted a joint proposal for a merger with the Rupee Cooperative Bank. Vidyadhar Anaskar, chairman of the board of directors of the bank, while addressing the media in Pune on Wednesday, said a merger proposal had been submitted to Reserve Bank of India (RBI) along with the Rupee Bank on January 17.

Mounting bad debt of the Rupee Bank had led RBI to put severe sanctions on the bank while superseding the erstwhile board of directors in 2013.

A board of administrators headed by chartered accountant Sudhir Pandit was looking into the affairs of the bank with RBI extending the banking licence intervals. In the latest of such extensions, the Rupee Bank’s licence was extended up to February 20.

Anaskar said the merger proposal was submitted after a thorough and joint discussion with the Rupee Bank. At present, the Rupee Bank has Rs 301.64 crore from 4.74 lakh customers, whose deposits are within Rs 1 lakh, and Rs 981.32 crore from 26,978 customers with deposits more than Rs 1 lakh.

The total deposit in the bank is around Rs 1,290.96 crore. Anaskar said the bank also has 304 employees who will be absorbed within the rolls of the MSC Bank.

The liabilities of the Rupee Bank being at Rs 1,465.95 crore, in its proposal, the MSC has talked about infusing Rs 941.87 crore while expecting Depositors Insurance and Credit Guarantee Corporation (DICGC) to infuse the remaining Rs 524.08 crore. The merger scheme, he said, will not affect deposit holder.

The merger proposal has talked about staggered withdrawal of deposits in the Rupee Bank. Thus, customers with less than Rs 1 lakh deposits will be allowed to withdraw every two months in instalments of 20 per cent. For deposits over Rs 1 lakh, the customer will be allowed to withdraw up to Rs 1 lakh in the first year.

The remaining amount can be withdrawn in the next five years, with 20 per cent of the amount being eligible for withdrawal. In both cases, the customers will be eligible for interest at the rate of 6.5 per cent or the prevalent interest rate of the MSC bank, whichever is higher.

Asked about the effect of the merger, Anaskar said the bank was strong enough to absorb losses.

After this merger, the MSC bank will increase retail business that will help diversify business, Anaskar added.

At present, the bank’s main business is in agriculture and agri-related sector with Anaskar wanting to increase its presence in the retail banking sector.

“The Rupee Bank’s existing infrastructure will help us do the same,” he said.

Both Pandit and Anaskar are hopeful that the RBI’s consent for the merger will come soon, after which the actual process will be completed in the next six months.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Advertisement
Advertisement
Advertisement
Advertisement