Maharashtra Cooperative Bank seeks RBI permission to takeover urban cooperative banks

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Pune | Published: October 20, 2018 2:43:26 AM

Vidyadhar Anaskar, chairman of the administrative board of the MSC Bank, said the move has been considered to strengthen UCBs that are currently struggling for survival.

rbi, maharashtra cooperative bankRupee Co-operative Bank has been granted further extension till November 30 by the RBI, which had put the troubled lender under ‘directions’.

Maharashtra State Cooperative Bank (MSC) has submitted a proposal to the Reserve Bank of India (RBI), seeking permission to either take over urban cooperative banks (UCBs) or take charge of the day-to-day operations of the financially weak banks or some branches of the UCBs.

Vidyadhar Anaskar, chairman of the administrative board of the MSC Bank said that this move has been considered to strengthen UCBs that are currently struggling for survival and are unable to find takers.

“MSC Bank has made the necessary changes in its by-laws that would permit the bank to take over or merge with a UCB, take over daily operations or look after daily operations of some of the branches so that the original bank could become financially stronger with smaller amount of branches and later strengthen operations. In case daily operations are taken over, the original name of the bank could be retained with a clear mention that it is run by MSC Bank,” he said.

“A proposal has been submitted to the RBI for a change in the guidelines of cooperative banks. MSC Bank has already received proposals from two urban cooperative banks that are currently in financial trouble, he said at a press meet in Pune. These include the Pune-based Rupee Cooperative Bank and Jijamata Cooperative Bank,” Anaskar said.

Rupee Co-operative Bank has been granted further extension till November 30 by the RBI, which had put the troubled lender under ‘directions’.

The bank was put under directions over its deteriorating financial health in February 2013. Under directions, the bank continues to undertake banking business with restrictions till its financial position improves.The bank’s attempts for a merger have not met with success so far. RBI has cancelled the licence of the Satara based Jijamata Cooperative Bank. Maharashtra has 507 UCBs.

Anaskar said he wishes to strengthen the cooperative sector in the state and for this purpose, he wishes to make ailing DCCBs work as the business correspondents of the MSCB. “These BCs would give details of eligible borrowers ( Primary Agriculture Credit Societies ( PACS) to us; we would give them fund which they can disburse as loans to the needy borrowers”, Anaskar explained, adding that in return MSC Bank would give 1% commission to DCCBs for providing the details of borrowers. At present, the NPAs of six DCCBs including Beed, Nagpur, Osmanabad, Buldana, WaXrdha are worrying. With Beed and Buldhana DCCBs being weighed down by NPAs hovering around 86 %, we are hoping this would enable them to get back on their feet, he said.

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