Financial Daily from THE HINDU group of publications
Friday, Mar 25, 2005
Financial Daily from THE HINDU group of publications Friday, Mar 25, 2005 |
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Money & Banking
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Co-operatives Raghuvanshi Co-op Bank depositors allowed to claim up to Rs 1 lakh Our Bureau
Mumbai , March 24 THE Reserve Bank of India has said that depositors of Raghuvanshi Co-operative Bank may claim up to Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), in the wake of the bank's licence being cancelled on account of it being insolvent. A requisition has been made to the Commissioner for Co-operation and Registrar of Cooperative Societies, Maharashtra, for winding up of the bank and for the appointment of a liquidator, said an RBI press release. The liquidator is required to expeditiously send the claims of all depositors to DICGC and every effort will be made to complete the formalities within about 90 days to settle the depositors' claims, the central bank has said. Raghuvanshi Co-operative Bank was earlier placed under directions with effect from the close of business as on August 29, 2002, in view of serious liquidity crunch faced by it. The inspection done by RBI with reference to its financial position as on December 31, 2002 revealed the bank's precarious financial position. A show cause notice was issued to the bank on September 28, 2004 advising it to show cause as to why the licence granted to it for carrying on banking business should not be cancelled. The bank's reply to the notice was examined and was found not satisfactory. In view of this and the various serious violations of RBI guidelines and negative net worth, negative CRAR, high NPAs and significant erosion of deposits revealed during the inspection, the RBI took the extreme measure of cancelling the bank's licence in the interest of the depositors.
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