In a major relief for the crisis-hit Baghat Urban Cooperative Bank (BUCB), the Himachal Pradesh Government has approved a Rs 20-crore revival package by infusing capital on a redeemable equity participation basis through the Himachal Pradesh Agriculture Cooperative Credit (Stabilisation) Fund.
The bank had sought a capital infusion of Rs 25 crore to improve its financial position. In addition to the government’s support, shareholders and traders have committed Rs 2.61 crore, including Rs 1 crore contributed by the bank’s employees, to strengthen the bank’s capital base.
As part of the revival strategy, the state government directed the Himachal Pradesh State Cooperative Bank (HPSCB), Kangra Central Cooperative Bank (KCCB) and Jogindra Central Cooperative Bank (JCCB) to contribute funds through a consortium arrangement. Accordingly, HPSCB has contributed Rs 14 crore, KCCB Rs 5 crore, and JCCB Rs 1 crore, completing the Rs 20-crore package.
Welcoming the decision, Devendra Shyam, Chairman of the Himachal Pradesh State Cooperative Bank, said the cooperative banking sector had consistently urged the government to support Baghat UCB’s revival.
“Chief Minister Sukhvinder Singh Sukhu has taken a landmark decision in the interest of the state, the cooperative movement and the bank’s customers. This timely intervention will restore public confidence in cooperative banking and accelerate the bank’s revival,” he said.
The Reserve Bank of India (RBI) had earlier placed the bank under regulatory restrictions under the Banking Regulation Act, 1949. The restrictions, including limits on lending and other banking operations, continue to remain in force pending further regulatory review.
