Tag: Rupee Bank

Rupee Bank administrator seeks its merger with another lender, BFSI News, ET BFSI

Banking & Finance

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Rupee Co-operative Bank’s administrator Sudhir Pandit said on Saturday that he has requested the RBI authorities to merge the city-headquartered bank with another, stronger lender.

He had a meeting with Reserve Bank deputy governors Rajeshwar Rao and M P Jain in this regard, he said in a statement here.

“Liquidation is not the solution. Instead, we requested for the merger of the bank with another strong bank and protection of the interest of depositors with deposits of over Rs five lakh,” Pandit said.

Union Minister of State for Finance and Banking Bhagwant Karad “coordinated and navigated the meeting”, he said.

He apprised both the deputy governors about the efforts taken by the bank for “recovery and earning operating profit”, Pandit added.

“If the bank goes into liquidation, then those who have deposits of above Rs 5 lakh, most of them senior citizens, may lose almost sixty-five percent of their deposits,” he added.

Dr Karad assured him that he would pursue the matter, the administrator said.



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Rupee Bank notifies refund scheme, relief for depositors of up to Rs 5 lakh, BFSI News, ET BFSI

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Pune: The stressed Rupee Cooperative Bank has notified the scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) to refund account holders up to Rs5 lakh.

The DICGC announcement is valid for 21 insured banks operating under all-inclusive directions (AID), including Rupee Bank. Rupee Bank administrators said they will forward all claims made under the scheme to DICGC by October 15, 2021, after which approved claims will be settled by the DICGC within 90 days.

Rupee Bank administrator Sudhir Pandit said it is “premature” to say what will happen in case of depositors holding amounts exceeding Rs5 lakh. “The DICGC told us to maintain expenses to run the bank for the next six months, within which hopefully there will be a resolution plan for the bank; be it merger with a larger bank, or its revival. We even met Union finance minister Nirmala Sitharaman,” said Pandit.

“A resolution plan or revival will ensure that larger depositors do not lose most of their money, because if the bank is liquidated, large depositors may collectively lose Rs 375 crore,” added Pandit.



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Rupee Bank administrator meets FM, BFSI News, ET BFSI

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Pune: The administrator of the stressed Rupee Cooperative Bank, Sudhir Pandit, met Union finance minister Nirmala Sitharaman on Wednesday and sought a resolution of the current situation of the bank, which was denied permission to merge with Maharashtra State Cooperative Bank by RBI last week.

The meeting was also attended by the Pune Lok Sabha MP Girish Bapat. “I apprised the FM of the situation of the bank, which is more than a century old, and the issues that senior citizens will face, who comprise nearly all of the high-value depositors. The FM assured me that she will look into the issue for a resolution. I told her of the plans that we have drawn up regarding the revival of the bank into a small finance bank,” he said.

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Rupee Bank admins express merger hope after Bapat’s Parliament speech, BFSI News, ET BFSI

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The current administrators of the stressed Rupee Cooperative Bank have expressed hope of a resolution of the financial institution, including a possible merger after Lok Sabha member Girish Bapat raised the issue in Parliament during the monsoon session.

Bapat urged the government to intervene regarding Rupee Bank, which has been run by Reserve Bank of India (RBI)-appointed administrators following allegations against the bank’s erstwhile management of misappropriation of funds and has been placed by the central bank under severe restrictions regarding withdrawals and advances.

Bapat said due to the restrictions, deposits worth more than a thousand crores of rupee could not be accessed by its customers, many of whom were senior citizens. He requested the Centre to revive talks of the bank’s possible merger with the Bank of Maharashtra.

When approached by TOI, a Bank of Maharashtra official declined to comment on Bapat’s speech. A source familiar with the issue said talks between the banks went on till 2018 when the Bank of Maharashtra was scheduled to take over Rupee Bank’s assets and liabilities under a scheme formulated by the RBI. However, the talks cooled after that. Rupee Bank is currently awaiting clearance from the RBI to merge with the Maharashtra State Cooperative Bank (MSCB), which is largely involved in agricultural banking, rather than retail.

“Bapat’s speech sparks hope of some resolution to the situation of the bank. If the Centre or the RBI decides to revive Rupee Bank’s merger with Bank of Maharashtra, we are ready to take the necessary steps,” said Sudhir Pandit, the administrator of Rupee Bank.



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RBI extends banking license of Rupee Co-operative Bank till August 31, BFSI News, ET BFSI

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The Reserve Bank of India has extended the banking license of the Rupee Co-operative Bank till August 31. Till March-2021, the Bank has made total recovery of Rs.263.93 crores and aggregate operating profit of Rs.70.70 crores during the last five years, a release from the Bank said.

“The Bank has taken steps like attachment of properties of defaulter borrowers, public auctions of the same, filing criminal suits against defaulter borrowers/guarantors, etc. The Bank has also informed the names of its defaulter borrowers/guarantors to other banks for effective recovery,” said Sudhir Pandit, administrator, Rupee Bank.

Till March-2021, the Bank had paid Rs.366.54 Crores to 92602 needy depositors under the Hardship Scheme. “The proposal for merger with The Maharashtra State Co-op. Bank Ltd., (MSC Bank) is pending with RBI. In the meantime, the Bank is exploring the possibility of various options such as merger with any other strong bank including co-operative banks, conversion into a Small Finance Bank with the help of a strategic investor and Reconstruction or Revival of the Bank. The Bank has requested the RBI to extend its co-operation and guide to explore these options which also require a significant amount of cooperation from high value depositors,” said Pandit.

“The Bank has five lakh depositors with aggregate deposits of Rs.1297 crores out of which around 99% depositors i.e.4,84,336 have deposits less than insurance cover limit of Rs 5 lakh. Their total deposits are to the tune of Rs.714 crores. While hardly 1% i.e. 4562 depositors have total deposits of Rs.583 crores which are above the deposit insurance cover. Therefore, RBI thinks it logical to liquidate the bank and fully refund deposits under insurance cover. Moreover RBI/DIC may get hold of banks liquidity of Rs.870 crores consisting of Government securities and banks’ own premises. Hence in the process, it has to lose very negligible funds of its own. If the bank is liquidated, high value depositors having deposits of more than Rs 5 lakh may lose around 65% of their total deposits irrespective of the option to save the bank ,” a release from the Bank said.



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