Page 17 - Banking Finance April 2021

CO-OPERATIVE BANK NEWS

Co-Operative Bank

News

Rupee Co-operative Bank "mismanaged" the proposed merger Cooperative Banks, Directions, 2020',
of the bank with the Maharashtra issued recently by RBI, it may consider
depositors demand their State Cooperative Bank (MSCB), with the proposals for merger and

money back Pandit "pushing" for the merger with amalgamation among UCBs under
A group of Rupee Co-operative Bank MSCB despite it having no retail three circumstances:
depositors have decided to press ahead banking experience. He also alleged Y When the net worth of the
with a case in the Bombay high court that depositors have been harassed amalgamated bank is positive, and
demanding most of their deposits and manhandled by people linked to the amalgamating bank assures to
back. They have also alleged the current bank administrators, for protect entire deposits of all
mismanagement and misbehaviour by raising questions about financial depositors of the amalgamated
the present bank administrators "impropriety". bank.
appointed by RBI. Y When the net worth of
Uni-State UCBs can convert
Dhananjay Khanzode, leader of a amalgamated bank is negative,
group of bank depositors, stated to multi-State UCBs via and the amalgamating bank on its
before any plans of merging or reviving amalgamation: New RBI own assures to protect deposits of
the bank, the depositors' interest the depositors of the amalgamated
should be secured first. "The depositors norm bank.
want their money back with interest. RBI has recently said that it will Y When the net worth of the
We are also prepared to accept part consider the proposals for merger and amalgamated bank is negative
of the money, up to 70% now. We will amalgamation of two or more Urban and the amalgamating bank
let the bank give the rest later after Cooperative Banks (UCBs). This comes assures to protect the deposits of
they recover more by attaching even as RBI is evaluating proposals by all depositors of the amalgamated
property and recovering debts. Before three investors for acquiring the scam- bank, with the financial support
any merger or revival plans are hit Punjab & Maharashtra Co-operative from the State government
approved, the depositors' interest (PMC) Bank. extended upfront as part of the
should be secured first, as many of us A uni-State Urban Co-operative Bank process of merger.
have suffered greatly due to the (UCB) can metamorphose into a multi-
pandemic, with our money stuck in the State UCB through amalgamation with The guidelines come in the backdrop of
bank," Khanzode remarked at a press a uni-State bank registered in another 52 UCBs being placed under All Inclusive
conference. Directions (since April 1, 2015 till
State, going by RBI's guidelines on December 11, 2020) by RBI, according
Khanzode alleged that the current amalgamation of two or more UCBs. to the RBI's latest 'Report on Trend and
administrators of the bank, including As per the 'Amalgamation of Urban Progress of Banking in India'.
the chairman Sudhir Pandit, have

BANKING FINANCE | APRIL | 2021 | 17