Page 19 - Banking Finance January 2024

Co-Operative Bank

News

Ex-J&K Co-operative Bank operative Bank and Patan Urban Co-op- "As per the data submitted by the
erative Bank. bank, 98.32 per cent of the depositors
chairman held by ED
RBI has imposed a monetary penalty of are entitled to receive full amount of
The Enforcement Directorate (ED) has Rs 5 lakh on Janakalyan Sahakari Bank for their deposits from DICGC," the Re-
arrested former J&K Co-operative Bank serve Bank said.
non-compliance, Rs 1 lakh on Pune Mer-
chairman Mohammad Shafi Dar in con- chants Co-operative Bank, Rs 5 lakh on The cooperative bank has been prohib-
nection with Rs 250-crore money laun- Indapur Urban Cooperative Bank, Rs 2 ited from conducting the business of
dering case in Jammu and Kashmir, offi- lakh on the Patan Urban Co-operative 'banking' which includes, among other
cials said. Dar was arrested along with Bank and Rs 5 lakh on Indapur Urban things, acceptance of deposits and re-
Mohammad Hilal A Mir, the chairman of Cooperative Bank. payment of deposits.
the River Jhelum Cooperative Housing
Building Society, a "fictitious firm", and Giving reasons for cancelling the li-
they will be presented before a special RBI cancels license of UP- cence, it said the cooperative bank
court, according to the officials. based Urban Co-operative does not have adequate capital and
earning prospects, and would be un-
The ED had conducted searches, includ- Bank able to pay its present depositors in
ing at Dar's residence, in connection The RBI cancelled the licence of Urban full.
with the case, and these resulted in re- Co-operative Bank Limited, Sitapur, Uttar
covery of incriminating evidence, they Pradesh as the lender does not have
claimed. UCBs need to discourage
adequate capital and earning prospects.
The fraud was done in the name of the Consequently, the bank ceases to carry very long and continuous
"fictitious" River Jhelum Cooperative on banking business, with effect from the tenures of directors: RBI
Housing Building Society, the officials close of business on December 07, 2023, Urban Co-operative Banks (UCBs) need
said. the central bank said in a statement. to discourage very long and continuous

RBI imposes monetary pen- The Commissioner and Registrar of Co- tenures of their directors, in accor-
operative, Uttar Pradesh has also been dance with the provisions of the Bank-
alty on 5 cooperative banks requested to issue an order for wind- ing Regulation Act, to avoid vested in-
RBI on December 14 said it has imposed ing up the bank and appoint a liquida- terests exercising undue influence over
a monetary penalty on five cooperative tor for the bank. the functioning of the board, accord-
banks citing various rule violations. On liquidation, every depositor would ing to the RBI.
These cooperative banks are Mumbai- be entitled to receive deposit insurance Induction of new directors will facili-
based Janakalyan Sahakari Bank, Pune claim amount of his/her deposits up to tate infusion of fresh ideas and per-
Merchants Co-operative Bank, Pune a monetary ceiling of Rs 5 lakh from spectives in the Board, per the RBI’s
Municipal Corporation Servant's Co-op- Deposit Insurance and Credit Guaran- ‘Report on Trend and Progress of Bank-
erative Urban Bank, Indapur Urban Co- tee Corporation (DICGC). ing in India 2022-23.’

BANKING FINANCE | JANUARY | 2024 | 17