Updated: August 13, 2021 10:15:16 am
Days after the Reserve Bank of India (RBI) struck down the merger proposal of the Rupee Cooperative Bank with the Maharashtra State Cooperative Bank, Sudhir Pandit, administrator of the former, met Union Finance Minister Nirmala Sitharaman to seek her help. In his press statement, Pandit said he has urged the minister to speed up the process of resolution and to have a pragmatic approach towards the issue.
The Pune-headquartered Rupee Cooperative Bank has been under instructions of the RBI for the last eight years. The then board of directors of the bank was superseded by the RBI due to mounting bad loans of the bank. The board of administrators has been trying to salvage the situation and press for merger of the bank, but till date there has been no success in the matter.
Over the last two years, the board had moved a proposal to merge the bank with the Maharashtra State Cooperative Bank and multiple proposals were submitted to this end. After sitting on the proposal for a long time, the RBI had struck it down last week. Because of the banking instructions issued by the RBI, lakhs of depositors are not able to withdraw their money from the bank.
While 99 per cent of the depositors will have their funds covered by insurance as their deposit is within the the Rs 5 lakh limit, rest of the depositors who have higher value will lose out in case the bank is pushed towards liquidation.
Pandit said he met the Union minister along with Pune MP Girish Bapat and Bhalchandra Kulkarni, publicity-in-charge of Sahakar Bharati. He said there was a need for a “pragmatic approach and innovative measures to address this chronic issue which may have cascading effects on entire UCB (urban cooperative banks) sector if it meets with an unfortunate fate”.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.