Mumbai based Maratha Sahakari Bank Depositors’ Association has charged that the Banking Amendments Act 2020 is not getting implemented and it has failed to help depositors of co-operative banks under RBI directions 35A.
Writing a joint letter, a number of depositors have requested the intervention of Prime Minister Shri Narendra Modiji, Finance Minister Smt. Nirmala Sitharaman and Co-operation Minister Amit Shah to look into the matter and take necessary action and instruct RBI to take the final decision for approval of Amalgamation of Maratha Sahakari Bank Ltd, Mumbai with Cosmos Co-operative Bank.
“We have followed up with RBI officials also but they are not sharing any reply and updates on approval for this Amalgamation which indicates Banking Amendments act 2020 not getting implemented and it is not helping depositors of co-operative banks under RBI directions 35A”, reads their letter.
There are about 65,000/- depositors and the majority of them are senior citizen depositors whose hard-earned money is stuck in the bank, lament depositors.
They also informed that “Depositors have received up to Rs 5 Lakh from DICGC. Total Rs. 140 Crore has been paid by DICGC. But about Rs 90 Crore amount is still with the bank. This indicates a deposit coverage ratio of approximately 55% which is very low.”
“As the deposit of above Rs. 5 Lakh was not safe, Depositors have given 20% share capital towards merger with Cosmos Bank, Pune. As per 12th September 2022 email received from RBI – The Amalgamation proposal of Cosmos Bank is rejected for the reason clause No. 7(3) is not consonant with prudent accounting principles standard and also from legal perspective”, says the body representing the depositors.
They remind us that this year India is celebrating Azadi ka Amritmahotsav. But British era rule 35 A section of RBI is creating total injustice to depositors of Co-operative banks under RBI restrictions 35A.
They also charge that it has been noticed that the RBI has closed many Co-operative Banks recently. This clearly indicates RBI section 35 A is not at all useful for depositors of Co-operative Banks as only extensions are given by RBI without any effort for merger even after the amendment of the Banking regulation act for co-operative banks under RBI directions 35 A.
“We are thankful that the Government of India had made necessary amendments in RBI policies for Amalgamation of Co-operative banks having negative net worth. In view of this RBI should approve Amalgamation of Maratha Sahakari Bank Ltd, Mumbai with Cosmos Co-operative Bank, Pune so that policies get implemented for depositors of Maratha Sahakari Bank and to bring success for mission of ‘Sahakar Se Samruddhi’, says the letter.