Rupee co-operative bank gets another extension for six months

PUNE: City-based Rupee Co-operative Bank today got another extension of 6 months from the Reserve Bank of India(RBI) to operate with restrictions.

“The bank is consolidating its financial position to make it mergeable with other banks,” said a note by Sudhir Pandit, chairman of the bank’s board of administrators.

The bank has been under restrictions since February 2013 due to its poor financial health.. Depositors have not been able to withdraw money except for a meagre sum, unless they could provide proof of their hardship or requirement like marriage, education fee, medical expenses, etc. The maximum withdrawable amount has been capped at Rs 1 lakh per depositor. Under the Hardship Scheme, the bank has, so far, allowed its depositors to withdraw a cumulative Rs 225 crore.

The bank has over 6.2 lakh depositors in the state with total deposits aggregating about Rs 1,400 crore.

The board, till December 31, 2016, could recover Rs 105 crore under the liberalized one-time settlement (OTS) scheme from the borrowers. By March 2017, the bank said it expects to recover Rs 130 crore from the borrowers.

Of this, the bank has been able to recover about Rs 25 crore by setting off loan repayments against deposits of some of its borrowers.

The bank, which recently earned its first profit in 15 years, has also implemented the core banking solution.

The bank said it has also initiated criminal actions against wilful and dishonest borrowers.

Last year, authorized officer tasked to find out impropriety in the Rupee Co-operative Bank case had found about 70 employees, including some ex-directors, of the beleaguered bank guilty of resorting to improper lending practices.
The officer Kishor Toshniwal ordered that a cumulative amount of Rs 1,490.61 crore along with simple interest of 12% per annum be recovered from the employees concerned.

Toshniwal added he found impropriety in as many as 227 loan cases from his investigation in the last 7.5 years.