RBI Cancels Licence of Rupee Cooperative Bank, Numbers Of Depositors Under Uncertainties

Reserve Bank of India (RBI), the central bank of India has today canceled the licence of Rupee Cooperative Bank Ltd., Pune. The bank has mentioned some inadequate capital and earning prospects. The Rupee Cooperative Bank Ltd. also failed to comply with various requirements of the Banking Regulation Act, 1949, the RBI said. "Consequently, 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, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank," the RBI mentioned in a circular today.

RBI thinks that the bank will not be able to repay the depositors in full, so it will not be necessary for the bank to operate. The RBI said, "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."

For the depositors, the RBI mentioned, "On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs. 5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961." So, the depositors with under Rs. 5,00,000 deposits will be safe totally, while around 5 lakh depositors are coming under this range. However, according to available report, 4,600 depositors are having deposits of more than Rs. 5 lakh, and their cumulative deposits are around Rs. 340 crore. These depositors' money can be unsafe partially.

"Consequent to the cancellation of its licence, Rupee Cooperative Bank Ltd., Pune. stands prohibited from conducting the business of 'banking' which includes, among other things, acceptance of deposits and repayment of deposits," RBI said. "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," the circular said today. Earlier, in 2013, the Rupee Cooperative Bank Ltd.'s board of directors was dismissed by the central bank, while Sudhir Pandit and others were appointed administrators. The administrators requested many proposals for revival but were not accepted.