Rupee Coop Bank depositors’ association to hold mega meet, seek legal recourse for economic justice

Published on Aug 11, 2022 09:17 PM IST

On Wednesday, the Reserve Bank of India (RBI) announced it had cancelled the banking licence of the beleaguered Pune-based Rupee Cooperative Bank, and directed the Registrar of Cooperative Societies to liquidate the bank

On Wednesday, the Reserve Bank of India (RBI) announced it had cancelled the banking licence of the beleaguered Pune-based Rupee Cooperative Bank, and directed the Registrar of Cooperative Societies to liquidate the bank (HT FILE PHOTO)
On Wednesday, the Reserve Bank of India (RBI) announced it had cancelled the banking licence of the beleaguered Pune-based Rupee Cooperative Bank, and directed the Registrar of Cooperative Societies to liquidate the bank (HT FILE PHOTO)
ByNadeem Inamdar

On Wednesday, the Reserve Bank of India (RBI) announced it had cancelled the banking licence of the beleaguered Pune-based Rupee Cooperative Bank, and directed the Registrar of Cooperative Societies to liquidate the bank. What does this mean for over five lakh depositors? To chalk out a plan of action, the depositors will hold a mega meet at the bank headquarters on Friday.

Balchandra Kulkarni, office bearer, depositors’ association said, “We are meeting on Friday to decide the future course of legal action in connection with RBI’s decision. We will primarily discuss the legal remedies available before seeking a reversal of the RBI decision. It is sad news for the depositors that the RBI cancelled the license giving only six weeks of notice.”

The Reserve Bank of India cancelled the license stating that it did not have adequate capital, earning prospects and it does not comply with regulations. The order will come into force from September 22, six weeks after the formal announcement.

Sanjay Bhilare, a depositor said, “This is a shocking decision for all depositors. The RBI has shown no concern for the submissions made by the depositors committee before the government seeking merger with a nationalised bank which would have kept the bank functional. Now, we will have to take this battle to court to ensure that RBI takes a decision which is in the larger interests of the depositors. The current decision is against the interests of depositors and unacceptable.”

Arvind Mokashi, another depositor said, “I had 70 lakh as deposit, wherein I had financially planned so as it would fetch me 40,000 per month as interest, which would be like a pension. But all my plans have been shattered due to RBI’s decision, which has to be challenged in court. Though a petition was filed in the court, the apex bank went ahead with the decision and it is contempt of court. Criminal action must be initiated against the top management of the RBI including their supervisor officers posted in the finance ministry.”

RBI chief general manager Yogesh Dayal in his order stated, the bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further. consequent to the cancellation of its licence, “Rupee Co-operative Bank Ltd, Pune” stands prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with effect from September 22, 2022. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of 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 700.44 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, he added.

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