The Maharashtra registrar of co-operative societies (RCS) has appointed D Doiphode as liquidator to wind up the crisis-laden Rupee Co-operative Bank. The liquidator will focus on recoveries and repayment to depositors of up to Rs 300 crore.
The Reserve Bank of India (RBI) on August 10 cancelled the Pune-based bank’s licence as the lender did not have adequate capital and earning prospects.
Trouble has been brewing at the Pune-based lender for some time. In February 2013, the RBI placed it under restrictions, which were extended from time to time.
Consequently, the RCS in exercise of power conferred under the Maharashtra Co-operative Societies Act, 1960, has appointed the liquidator, vide order dated October 31, the RBI said in statement.
On September 22, the Bombay High Court had suspended the cancellation order dated August 8 until conclusion of the appeal filed by Rupee Co-operative Bank, said RBI.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) has already paid about Rs 700 crore to eligible depositors. The liquidator has the obligation to return the money to DICGC, based on recoveries and liquidation, said a state government official.
While a few employees will be retained for recoveries, about 200 could lose their jobs, added the official.
Until October 31, the administrator was running the affairs of the ailing urban co-operative. In the past two years, efforts were made to merge Rupee Co-operative Bank with other sound urban co-operative lenders, including Pune-based Cosmos Co-operative Bank.
In August 2021, the RBI had declined the merger proposal of the Maharashtra State Co-operative Bank with Rupee Co-operative Bank.
In December 2021, the country’s largest urban co-operative bank Saraswat Co-operative Bank had evinced an interest in the merger of Rupee Co-operative Bank with itself.
Mehsana Urban Co-operative Bank, too, had come up with a merger proposal that was rejected in January this year.
A total of 27 small co-operative banks have been liquidated in the past five years, while 42 were closed on account of mergers during the period, Minister of State for Finance Bhagwat Karad told Parliament on July 26.