Dr. Abhyankar pointed out that some large-scale but sick UCBs like Rupee Co-operative Bank are facing cancellation of licences. No other UCB is in a position to absorb big losses of more than Rs.500 crore and therefore, not ready for merger.
Elaborating further Dr Abhyankar said “ If Rupee Co-operative Bank is de-licensed, the entire UCB sector will face ‘Tsunami’ and many other small & medium UCBs may have to face a run of depositors”.
He exhorted Dr. Rajan to find out some way to save Rupee Bank from extinction. Dr. Rajan assured to consider this by consulting the BSF and his senior colleagues.
Reserve Bank of Indian had extended the period of directions imposed on Rupee Co-operative Bank for a further period of three months from August 22, 2014 to November 21, 2014.
Close to twenty months after the Reserve Bank of India (RBI) suspended the Board of Directors of the Rupee Cooperative Bank and imposed strict regulations on it, plans to merge it with another bank have not made much progress.
A proposal to merge the bank with Saraswat Bank has yet not fructified while the move to merge it with Allahabad Bank is stuck pending a due diligence report.
The cooperative bank posted a cumulative loss of Rs 613 crores for financial year 2013-14.
Due to spiralling non-performing assets (NPA), the RBI had put the bank under administrators last year. RBI put a moratorium on withdrawal of money from the bank, which led to consternation among its 6 lakh customers in 36 branches.
Director Sugar Commissionerate Sanjaykumar Bhosale and chairman Vidya Sahakari Bank Vidyadhar Anaskar had been appointed administrators of the cooperative bank.