Page 20 - Banking Finance March 2023

Co-Operative Bank

News

RBI imposes restrictions amount of his/her deposits up to Rs 5 "On liquidation, every depositor would
lakh from the Deposit Insurance and be entitled to receive deposit insurance
on 5 co-operative banks
Credit Guarantee Corporation, RBI claim amount of his/her deposits up to
The Reserve Bank of India on Friday said. a monetary ceiling of Rs 5,00,000 from
imposed several restrictions on five
DICGC," it added.
cooperative banks, including on with- RBI cancels licence of MP-
drawals, in the wake of the deteriorat-
based Garha Co-operative Amit Shah calls for intro-
ing financial condition of the lenders.
The restrictions will remain in place for Bank spection in cooperative
six months, the Reserve Bank of India
The Reserve Bank of India (RBI) on
(RBI) said in separate statements. sector, assures Centre's
Monday cancelled licence of Garha
With restrictions in place, the banks, Cooperative Bank, Guna in Madhya support
without prior approval of RBI, cannot Pradesh as the lender does not have Union Minister Amit Shah on Saturday
grant loans, make any investment, in- adequate capital and earning pros- said the cooperative sector in the coun-
cur any liability, and transfer or other-
pects. About 98.4 per cent of the de- try needs to introspect to improve sys-
wise dispose of any of its properties.
positors of the co-operative bank are tems and this exercise would receive
Customers of HCBL Co-operative Bank, entitled to receive full amount of their the full support of the Centre.
Lucknow (Uttar Pradesh); Adarsh deposits from Deposit Insurance and
Speaking at the 'Sahkar Maha Con-
Mahila Nagari Sahakari Bank Credit Guarantee Corporation (DICGC),
clave on Banking and Sugar Industry'
Maryadit, Aurangabad (Maharashtra); the RBI said in a statement.
organised by media group Sakal, Shah
and Shimsha Sahakara Bank
Consequent to the cancellation of its also pointed out to the drop in the
Niyamitha, Maddur, Mandya District in
licence, the bank is prohibited from
Karnataka cannot withdraw funds number of cooperative sugar mills in
conducting various activities, including
from their accounts due to present li- Maharashtra and the rise in the num-
acceptance of deposits and repayment
quidity position of the three lenders. ber of private ones.
of deposits with immediate effect.
However, customers of Uravakonda "As far as credit societies, urban banks
"The bank does not have adequate
Co-operative Town Bank, Uravakonda, and district cooperative banks are con-
capital and earning prospects," the RBI
(Anantapur District, Andhra Pradesh) cerned, a lot needs to be done. We had
and Shankarrao Mohite Patil Sahakari said while cancelling the licence with a series of meetings with the Reserve
Bank, Akluj (Maharashtra) can with- effect from the close of business hours. Bank of India and I can say on the is-
draw up to Rs 5,000.
Further, it said Garha Co-operative sues that were brought to me here on
The eligible depositors of all the five Bank with its present financial position this platform, we will ensure all these
cooperative banks would be entitled to would be unable to pay its present institutions do not face any injustice,"
receive deposit insurance claim depositors in full. he said.

18 | 2023 | MARCH | BANKING FINANCE