Page 22 - Banking Finance December 2020

CO-OPERATIVE BANK NEWS

Nalanda Central Cooperative Bank Presi- around 5 lakh depositors and 35 You cannot leave it to PMC Bank to
dent Amarendra Kumar and others. branches. decide to whom it will disburse funds,"
A press release issued by Sudhir Pandit, said a bench of Chief Justice D.N. Patel
RBI extends direction again chairman of the board of administra- and Justice PrateekJalan.
Even while the RBI keeps extending the tors, stated that the bank was hopeful "This is not satisfactory. You cannot
Direction of Rupee Co-operative Bank, of a quick merger with the leave it to PMC Bank to decide. There
there is no word on the MSC Bank pro- Maharashtra State Cooperative Bank. has to be some way to monitor it,
posal of merger of the beleaguered RBI had asked MSCB to submit the fi- something independent of the admin-
UCB with MSCB. Being a co-op bank nancial position of and these were istrator (appointed by RBI)," the bench
under Nabard control, the MSC Bank submitted long time back and yet added.
is also waiting for NABARD's green there is not a word from the regula- The court was hearing an application
light for its merger with the Rupee tor, said a Bank official on condition of by consumer rights activist Bejon
Cooperative Bank and the City Coop- anonymity. Kumar Misra seeking directions to the
erative Bank. Indian Cooperative has learnt that the central bank to consider other needs
It bears recall that the MSC Bank lends proposal of merger of Rupee Bank with of PMC Bank depositors for with-
money to agricultural enterprises like MSCB is gathering dust in the RBI cor- drawal, such as education, wedding
sugar mills and agri processing units. ridors. Though RBI does give extension and dire financial position, not just se-
According to VidyadharAnanskar, to the UCB again and again, it is yet rious medical emergencies.
chairman of the board of administra- to take a call on its merger. It is to be The bench also told RBI that there
tors, the bank's exposure to the sector noted that MSC Bank has already car- should be a grievance redressal
is Rs 22,000 crore, of which Rs 10,000 ried out the due diligence and is ready mechanism in place to address the
crore is earmarked for the sugar sec- for the merger. There are more than grievances of depositors who are not
tor as pledge loan and the rest to the 6 lakh depositors associated with the satisfied by the decision taken by PMC
agricultural sector. Meanwhile, the Rupee Bank, who continue to suffer. Bank or the administrator.
bank has decided to do retail lending
with a view to minimizing the risk. HC raps central bank over No respite for Madgaum

In its recent order, the Reserve Bank PMC withdrawals Urban Co-op Bank
of India extended the validity of the
The Delhi High Court pulled up the
directions on the Rupee Cooperative Reserve Bank of India has extended
Reserve Bank of India (RBI) for leaving
Bank till February 28, 2021. The UCB the Directive issued to the Madgaum
it to scam-hit PMC Bank to decide
was put under Directions from the which emergencies cited by its deposi- Urban Co-operative Bank Ltd.,
close of business on February 22, 2013. tors were to be considered for disbur- Margao, Goa for a further period of
The validity of the directions was ex- sal of Rs. 5 lakh to them, saying since three months from December 03, 2020
tended from time-to-time, the last to March 02, 2021.
the central bank imposed the restric-
being up to November 30, 2020. The Madgaum Urban Co-operative
tions, it should have been the one tak-
Meanwhile, beating all odds Rupee Co- ing the decision. Bank Ltd., Margao, Goa was placed
operative Bank earned an operating under Directions vide Directive dated
Punjab and Maharashtra Cooperative
profit of Rs 19.55 crore in FY20. Size- Bank has been put under restrictions, April 26, 2019 from the close of busi-
able reduction in staff strength, as well including limiting withdrawals, by the ness on May 02, 2019 for a period of
as the curtailing of administrative ex- RBI, following the unearthing of a Rs. six months. The validity of the above
penses, are said to have helped the 4,355-crore scam. Directions was extended from time to
debt-ridden Rupee Cooperative Bank time, the last being vide Directive
to report a profit. The bank has made "RBI was to apply its mind and not act dated July 27, 2020 up to December
a total recovery of Rs 15.40 Crores till as a post office. If you (RBI) have im- 02, 2020.
last financial year. The bank has total posed the restrictions, then you have All other terms and conditions of the
deposits of Rs 1,289.72 crore and loans to apply your mind. You cannot accept Directive under reference shall remain
to the tune of Rs 298.50 crore, with what PMC Bank says as gospel truth. unchanged.

22 | 2020 | DECEMBER | BANKING FINANCE