Curtains come down on 110-year-old Rupee Co-operative Bank in Pune
A 110 years after coming into being, curtains will come down on the Rupee Co-operative Bank (RCB) Ltd on Thursday
A 110 years after coming into being, curtains will come down on the Rupee Co-operative Bank (RCB) Ltd on Thursday. Despite painstaking efforts by RCB Ltd employee federations to save the financial institution from closure comprising legal petitions and administrative appeals, the Bombay High Court refused to offer any respite to investors.
On Wednesday, RCB investors met Union finance minister Nirmala Sitharaman during her Pune visit and urged her intervention.
Rupee Bank Depositors Rights Committee members Srirang Paraspatki and Sunil Gole met the minister over the issue. Paraspatki said, “In the larger interest of the depositors, we request the minister to consider merger of RCB with another private bank and a letter to the effect has already been given.”
Sitharaman said, “I will look into the matter.”
The Market Yard headquartered bank was established on November 21, 1912, as part of the Swadeshi movement through mass equity participation of rupees one each though in its last two decades, instituted witnessed a series of issues including financial misappropriation, stringent restrictions on its operations by the Reserve Bank of India (RB)I, multiple attempts to hold to account those accused of mismanaging the bank and also attempts to revive it.
The license cancellation decision has saddened and shocked the depositors, particularly those high-value depositors of over 4,000 including senior citizens who held around Rs340 crore in deposits. According to RBI, the high-value depositors will get back a maximum of Rs5 lakh, regardless of their total deposit in the bank, after liquidation under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act.
Bhalchandra Kulkarni, senior office-bearer Rupee Bank depositors’ rights forum, said, “All our hopes are dashed and there is no further chance of a turnaround. Although there is a bank ready to invest ₹550 crore in RCB, why is the RBI not ready to accept the proposal is beyond our understanding. It is a very difficult situation. In up to ₹5 lakh, Rs700 crores were given to the depositors and above Rs5 lakh and Rs350 crores are pending.
Deepak Gosavi, a depositor said, “It’s sad to see the bank being shut down after RBI order. We request the government to intervene in the matter.”
The RBI cancelled the licence of RCB vide order dated August 8, 2022, in compliance with the High Court of Bombay order dated September 12, 2017. Consequently, the apex bank ordered that the bank will cease to carry on banking business, with effect from September 22, 2022. The commissioner for cooperation and registrar of cooperative societies, Maharashtra have also been requested to issue an order for winding up the bank and appoint a liquidator.
At the time of establishment, the bank management had got the motivation to develop it as a cooperative society by the works of Late Lokmanya Tilak. The founder members were the late Govindrao Dharap, late Keshavrao Doke and late Kalurambhau Naik. The bank celebrated its platinum jubilee anniversary in 1986-1987 and received scheduled stature in 1988.
The bank mainly operated in Maharashtra with a 36-branch network of 36 with 5 extension counters. The RCB showed signs of dismal performance in 2002 after which the RBI appointed an administrator to look after its governance and in 2013 the bank was subjected to harsh restrictions under the Banking Regulation Act.
Liquidation process
*The RBI cancelled the licence of the bank on the grounds that the bank does not have adequate capital and earning prospects.
*On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of deposits up to a monetary ceiling of Rs5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961.
*As per the data submitted by the bank, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC.
*As on May 18, 2022, DICGC has already paid Rs700.44 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.