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Proposal for merger of Rupee bank with MSCB submitted to RBI
PUNE The Maharashtra government has sent to the Reserve Bank of India (RBI) a proposal to merge Rupee Bank with the Maharashtra State Cooperative Bank (MSCB), the two cooperative banks said in a joint statement here on Wednesday.
The move that has raised hopes among Rupee’s depositors to get back their money.
Last year the bank approved a sizeable number of loans, as against deposits, as a result of which, withdrawals by the depositors were stopped.
According to Vidyadhar Anaskar, chairman of MSCB’s administrative board, the proposal was submitted to RBI on January 17 and both lenders are positive about the outcome. The move has come just a month before Rupee Bank’s extension offered by RBI ends.
“We have submitted to RBI one of the best revival plan for Rupee bank through a joint proposal. So far RBI has been positive and we will soon know the decision over merger proposal,” said Anaskar who held joint press conference on Wednesday with Sudhir Pandit, who heads administrative board of Rupee bank.
“It may take upto six months for due diligence before RBI takes any decision,” said Anaskar.
The merger proposal submitted by both lenders to RBI includes allowing Rupee bank depositors with Rs 1 lakh deposit to withdraw money within one year in five instalments. Those having more than Rs 1 lakh deposit can withdraw 20 per cent money every year after first 12 months when the depositors are eligible of withdrawing money in five instalments.
“The proposal also includes absorbing staff of Rupee bank as per the requirement in state cooperative bank,” said Anaskar.
There are five lakh customers of the Rupee bank, who as per current restrictions of RBI can withdraw Rs 5,000 per year in normal circumstances. During November last year, RBI had extended Rupee Cooperative Bank’s operation deadline till the end of February 2020.
“We are hopeful that RBI will approve proposal and it will be win-win situation for depositors and staff of Rupee bank,” said Pandit.