Liquidation drags on as asset sales crawl; Rs 40 cr in larger claims remains unpaid
MARGAO
For nearly 800 depositors of the erstwhile Madgaum Urban Cooperative Bank (MUCB), the wait for their hard-earned savings has stretched into its fourth year, with little clarity on when — or if — their remaining deposits will be returned.
The liquidation process of the Margao-based cooperative bank was initiated in 2022 after the Reserve Bank of India (RBI) cancelled the bank’s licence in 2021 over regulatory and financial concerns. While small depositors have since received their dues, those with deposits exceeding Rs 5 lakh continue to remain in limbo.
According to official sources, around 10,000 depositors with balances below Rs 5 lakh have already been settled. However, approximately 800 depositors — collectively owning nearly Rs 40 crore — are yet to be repaid.
When contacted, designated officer appointed by the Liquidator, Kishore Amonkar, admitted that there has been “no change on the ground” regarding settlement of the larger claims. “It has been four years since the liquidation process began after the RBI cancelled MUCB’s licence. Around 800 depositors with claims amounting to approximately Rs 40 crore are still to be settled,” Amonkar said.
He added that the liquidator’s office is working on various options to mobilise funds required to clear the pending claims. “We are exploring different solutions to settle the claims of depositors. We hope something positive emerges from our initiatives,” he said.
Asset disposal stalled
The repayment of large depositors hinges largely on the disposal of the bank’s assets. So far, the liquidator has managed to sell the Margao branch building located near Lohia Maidan. However, the remaining assets — including other office premises — have not yet been disposed of.
Sources indicated that nearly Rs 40 crore would be required to fully settle the claims of the remaining depositors. The inability to liquidate assets at the expected pace has significantly delayed the process.
MUCB’s licence was cancelled by the RBI in 2021 due to its deteriorating financial position and inability to comply with regulatory requirements. Following the cancellation, the bank ceased operations, and a formal liquidation process was initiated in 2022.
Under deposit insurance norms, depositors are insured up to Rs 5 lakh, which explains why smaller account holders have already received their dues. However, those with deposits exceeding this threshold are dependent on asset recovery and liquidation proceedings for repayment.
Uncertain road ahead
For the 800 affected depositors — many of whom reportedly invested their life savings — the prolonged delay has caused mounting frustration and financial hardship. With no major breakthrough in asset disposal, the timeline for recovery of the remaining Rs 40 crore remains uncertain. As the liquidation enters its fifth year, hope persists — but for now, the wait continues.
Regulatory hurdles stall use of Rs 17 cr unclaimed funds amid liquidation
MARGAO: Even as hundreds of anxious depositors await clarity on the fate of their hard-earned savings, nearly Rs 17 crore worth of unclaimed deposits remain idle with the Madgaum Urban Cooperative Bank, officials appointed by the Liquidator have revealed.
According to sources, the substantial sum remains untouched as thousands of depositors have yet to file claims to recover their deposits. The reasons for the lack of claims remain unclear, leaving authorities puzzled.
Officials stated that while approximately 800 depositors with balances exceeding Rs 5 lakh are still awaiting settlement of their dues, the bank is currently unable to utilise the unclaimed Rs 17 crore to meet these liabilities due to regulatory and procedural constraints.
“The situation is extremely challenging,” a source close to the liquidation process said. “We have unclaimed deposits amounting to Rs 17 crore, but we cannot directly use this liquid cash to settle the claims of the 800 depositors who have balances above Rs 5 lakh. We are exploring possible solutions within the legal framework.”
Sources indicated that officials are considering approaching the Deposit Insurance and Credit Guarantee Corporation (DICGC) to seek clarity on whether the unclaimed funds can be utilised to partially settle pending claims. Under existing norms, DICGC insurance covers deposits up to Rs 5 lakh per depositor, leaving those with higher balances exposed to losses during liquidation proceedings.
The proposal, if approved, could offer partial relief to depositors whose funds exceed the insured limit. However, any such move would require regulatory approval and compliance with banking and liquidation laws.
