Even while the RBI keeps extending the Direction of Rupee Co-operative Bank, there is no word on the MSC Bank proposal of merger of the beleaguered UCB with MSCB.
Being a co-op bank under Nabard control, the MSC Bank is also waiting for NABARD’s green light for its merger with the Rupee Cooperative Bank and the City Cooperative Bank.
It bears recall that the MSC Bank lends money to agricultural enterprises like sugar mills and agri processing units. According to Vidyadhar Ananskar, chairman of the board of administrators, the bank’s exposure to the sector is Rs 22,000 crore, of which Rs 10,000 crore is earmarked for the sugar sector as pledge loan and the rest to the agricultural sector. Meanwhile, the bank has decided to do retail lending with a view to minimizing the risk.
In its last week’s order, the Reserve Bank of India extended the validity of the directions on the Rupee Cooperative Bank till February 28, 2021. The UCB was put under Directions from the close of business on February 22, 2013. The validity of the directions was extended from time-to-time, the last being up to November 30, 2020.
Meanwhile, beating all odds Rupee Co-operative Bank earned an operating profit of Rs 19.55 crore in FY20. Sizeable reduction in staff strength, as well as the curtailing of administrative expenses, are said to have helped the debt-ridden Rupee Cooperative Bank to report a profit.
The bank has made a total recovery of Rs 15.40 Crores till last Financial year. The bank has total deposits of Rs 1,289.72 crore and loans to the tune of Rs 298.50 crore, with around 5 lakh depositors and 35 branches.
A press release issued by Sudhir Pandit, chairman of the board of administrators, stated that the bank was hopeful of a quick merger with the Maharashtra State Cooperative Bank.
RBI had asked MSCB to submit the financial position of and these were submitted long time back and yet there is not a word from the regulator, said a Bank official on condition of anonymity.
Indian Cooperative has learnt that the proposal of merger of Rupee Bank with MSCB is gathering dust in the RBI corridors. Though RBI does give extension to the UCB again and again, it is yet to take a call on its merger.
It is to be noted that MSC Bank has already carried out the due diligence and is ready for the merger. There are more than 6 lakh depositors associated with the Rupee Bank, who continue to suffer.
