Replying to legislators including Dr Rajeev Kumar Bhagat and Vikram Randhawa, Cooperative Minister Javid Ahmad Dar informed the House that the Jammu and Kashmir SCARD Bank, set up in 1962 under the Cooperative Societies Act, is not registered under the Banking Regulation Act and therefore does not fall under RBI oversight, quote media reports.
He said the bank is under the Union Territory government through the Registrar of Cooperative Societies. Though not declared bankrupt, liquidation has been initiated due to mounting losses, weak governance, poor recovery and liquidity stress.
Payments of matured fixed deposits, including at Bishnah branch, have stopped. Verified depositor claims will be settled in phases after winding-up orders, as deposit insurance does not apply to the bank.