Reserve Bank of India has cancelled the licence of “Rupee Co-operative Bank Ltd, Pune” in compliance with the Hon’ble High Court of Bombay order dated September 12, 2017. The order shall become effective after six weeks from today, says RBI in a press release on Wednesday.
Reacting to the news, UCBs’ representative in the RBI Board Satish Marathe said “While any cancelation of Licence is both unfortunate and painful as it dents the image of the UCB Sector, this extreme step could have been averted, if large Depositors had not been adamant, I feel. These large Depositors are today facing a complete loss as they preferred to be led by less knowledgeable/under informed Advisors.”
In the press release RBI says “The licence was cancelled as the bank does not have adequate capital and earning prospects. Consequently, the bank will cease to carry on banking business, with effect from September 22, 2022. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.”
The continuance of the bank is prejudicial to the interests of its depositors. The bank with its present financial position would be unable to pay its present depositors in full; and the Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, says RBI.
Consequent to the cancellation of its licence, “Rupee Co-operative Bank Ltd, Pune” stands prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with effect from September 22, 2022.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on May 18, 2022, DICGC has already paid Rs 700.44 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.
