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Co-op banks in red being deregistered

Monday, September 10, 2018
By Raju Vernekar

The Registrar of Cooperative Societies has began the process of deregistration of co-operative banks, which remain liquidated for over 10 years, with no sign of revival, under the provisions of the Maharashtra Co-operative Societies Act, 1960.

Under section 84 of the above act, the books of the indebted society are inspected and under section 103, a liquidator is appointed to take stock of the liabilities, assets, depositors’ claims etc. as part of wind up procedure. Now respective Deputy Registrar of Cooperative Societies from Mumbai have been asked to submit report by current month end to the Commissioner, Cooperatives so that the further action can be taken.

RBI has already cancelled banking licenses of these banks. Some of the banks facing deregistration include: Metropolitan Co-operative Bank Ltd., Mumbai (date of liquidation by RBI -20/06/1992), Chetna Co-operative Bank Ltd., Mumbai (date of liquidation -01/12/1994), Swastik Janata Sahakari Bank Ltd., Mumbai (date of liquidation -14/12/1994), .Mafatlal Engg. Employees Co-operative Bank Ltd., (date of liquidation -31/03/2002), Vinkar Sahakari Bank Ltd., Mumbai (date of liquidation -24/08/1998), Awami Mercantile Co-operative Bank Ltd., Mumbai (date of liquidation -06/01/1999), Ravikiran Urban Co-operative Bank Ltd., Mumbai (date of liquidation -15.01.1999), Indira Sahakari Coop Bank Ltd., Mumbai (date of liquidation -29.06.1999) amongst others.

Of these all the depositors of Raghuvanshi and Parivartan are eligible to get their claims up to Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation.

Maharashtra has a 32% share of co-operative banks in the country. Of the 1,618 urban coop banks, 526 urban banks are in Maharashtra. However with 106 coop banks facing liquidation and another 10 under administrators, the financial health of coop banks in Maharashtra has suffered. The mismanagement, lack of professional handling and political interference have hurt cooperative banking in the state. As of now the coop banks, have non-performing assets to the tune of 10-15%.

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