PANAJI: The Reserve Bank of India (RBI) canceled the License Bank Co-Operative Urban Madgaum Ltd and has said that the Bank will stop carrying out banking operations from Thursday.
RBI has also written a letter to the Cooperative Community Registrar – Goa to issue orders to lift the bank and appoint liquidators for the bank.
RBI cancels the license because urban madgaum cannot obey banking norms.
“Banks with their current financial position will not be able to pay their current depositors and public interests will be affected if banks are permitted to carry out their banking business further,” RBI said.
The central bank said that 99% of 56,600 depositors would receive their funds.
This is the second cooperative bank in the state to lose its banking license.
Urban Cooperative Bank Mapusa lost a banking license in April 2020 for reasons similar to the Urban Cooperative Bank Madgaum.
“RBI has a Vit order on July 27, canceling the License Bank Co-Operative Urban Madgaum Limited.
As a result, the bank stopped to run the banking business, with the effects of business closure on July 29,” said General Manager of Yogesh Dayal Manager.
With the cancellation of the banking license and the process of the liquidation process, the process of paying 56,600 in the previous bank depositors will begin in accordance with the insurance deposits and the Credit Guarantee Corporation Law (DICGC).
On liquidation, each depositors will be entitled to receive the number of deposit insurance claims until the monetary ceiling of Rs 5,00,000 from DICGC.
“Madgaum Urban is in a discussion with Thane Janata Sahakari Bank and Cosmos Bank, which is one of the largest cooperative banks in the country, but the conversation falls,” said Bank Kishore Amonkar Managing Director.
“We have asked for capital infusion and former Manohar Parragar’s main minister, but then he fell ill.” For the next, madgaum urban cannot accept deposits or distribute funds or loans.
The bank has a deposit for RS 189 Crore songs, while the quantum of banks from bad loans or problematic assets stands at Rs 45 Crore.
The bank has nine branches and 85 staff and tries to recover loans from a bowl.
During the inspection in 2014, it was observed that the Bank’s NPA (non-performing assets) of the Bank was above 15% and the Bank Crar which was considered 6.1%.
“This is the second cooperative bank to lose the license in Goa and this is a big loss for depositors and small borrowers.
The government does nothing to help us,” Amonkar said.
The RBI has monitored the financial position of the bank since November 2009 and has imposed financial sanctions at an extended bank every six months.
The central bank has banned cooperative banks from opening ATMs, expanding branches, acquiring new places or dividend payments.