Page 19 - Banking Finance June 2021

CO-OPERATIVE BANK NEWS

farmers on repayment of regular March-end 2020, the statement said. to the bank's financial position as on
instalment of long-term loans from Net NPA was unchanged at 1.81 per March 31, 2018 and the report filed
Primary Cooperative Bhoomi Vikas cent of net advances. thereafter revealed non-compliance
Banks has been extended till June 30, The Bank's capital to risk-weighted with the directions issued by the RBI.
2021. Earlier, the deadline was March assets ratio increased to 13.89 per The regulator issued a notice to the
31, 2021. Farmers who suffered crop cent as at March-end 2021 against bank advising it to show cause as to
damage due to heavy rains and 12.96 per cent as at March-end 2020. why it should not be penalised for non-
hailstorms have not been able to take compliance with the aforesaid
The 115-year-old Bank has a presence
advantage of the scheme in various directions.
across 11 states through 198 branches
districts due to the COVID-19 and 213 ATMs After considering the bank's reply to
pandemic. the Notice and oral submissions made
RBI imposes fine on during the personal hearing, the RBI
SVC Co-operative Bank came to the conclusion that the
Dhrangadhra People's Co- aforesaid charges were substantiated
net profit up by 6 per cent
op Bank by RBI and warranted imposition of monetary
SVC Co-operative Bank's net profit penalty," the RBI said.
increased by 6 per cent year-on-year The Reserve Bank of India (RBI)
(yoy) to Rs. 150 crore in the financial imposed a penalty of Rs Two lakh on
year ended March 31, 2021 against Rs. The Dhrangadhra People's Co- United Co-operative
142 crore in the previous financial year operative Bank based in Bank's licence cancelled by
(FY20). Surendranagar, Gujarat, for non-
compliance with the Central Bank's RBI
The Board of directors of the Mumbai- directions. The Reserve Bank of India has
headquartered multi-state urban co- cancelled the licence of United Co-
operative bank recommended a The co-operative bank failed to comply operative Bank Ltd of West Bengal as
dividend of 12 per cent for the year, with directions on 'Placement of the bank does not have adequate
subject to approval from the Members Deposits with Other Banks by Primary capital and earning prospects. All the
during the Annual General Meeting. (Urban) Co-operative Banks (UCBs)' depositors of the bank will receive the
and 'Depositor Education and
SVC Bank's total deposits grew about Awareness Fund Scheme, 2014', the full amount of their deposits from the
5 per cent to stand at Rs. 17,332 crore RBI said in a release on its website. Deposit Insurance and Credit
as at March-end 2021 against Rs. Guarantee Corporation (DICGC). The
16,501 crore as at March-end 2020, "This penalty has been imposed in bank ceases to carry on banking
according to the Bank's statement. exercise of powers vested in the RBI business with effect from the close of
under the provisions of section 47 A (1) business on May 13, 2021 and the
Within total deposits, the proportion of (c) read with section 46 (4) (i) and
low-cost CASA (current account, section 56 of the Banking Regulation process of liquidation will now begin.
savings account) deposits rose to 27 Act, 1949, taking into account the The bank does not have enough
per cent from 24 per cent. failure of the bank to adhere to the liquidity to pay depositors in full, RBI
said.
Total advances were up about 6 per aforesaid directions issued by the RBI,"
cent to Rs. 12,328 crore as against Rs. it added. On liquidation, every depositor is
11,608 crore. The regulatory action is based on entitled to receive deposit insurance
claims up to Rs 5 lakh. The RBI decision
Within total advances, retail advances deficiencies in regulatory compliance came after the Registrar of
rose 14.51 per cent to Rs 2,077 crore and is not intended to pronounce upon Cooperative Societies, West Bengal
and corporate advances were up by the validity of any transaction or had requested to issue an order for
4.66 per cent to Rs 10,251 crore. agreement entered into by the bank winding up the bank and appoint a
Gross non-performing assets (NPA) with its customers, the central bank liquidator. "Public interest would be
showed a marginal uptick to 3.96 per added. adversely affected if the bank is
cent of gross advances as at March 31, The statutory inspection of the bank allowed to carry on its banking
2021 against 3.74 per cent as at conducted by the RBI with reference business any further" RBI said. T

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