MARGAO
The 48th annual report of the Madgaum Urban Cooperative Bank (MUCB) has painted a gloomy picture of the bank with the management officially saying there’s neither scope to generate earnings from investments in view of the Reserve Bank of India’s directives nor there’s any scope for the bank’s merger because of the Covid-19 pandemic.
Ahead of the 48th annual general body meeting of the MUCB scheduled on December 26, the Director’s report for the year 2019-20 is categorical in saying that the imposition of the all-inclusive directions by the Reserve Bank of India has frozen all avenues of earnings of the bank, saying there’s no scope of generating earnings from investments.
The report is clear in saying that the regulatory instructions that followed from RBI has further affected the business figures such as decrease in owned funds to Rs 101.74 lakh from Rs 586.80 lakh, a decrease pegged at Rs 485.06 lakh.
The report stated that the bank’s deposits have decreased from Rs 21,986.69 lakh to Rs 19,976.08 lakh, a decrease of Rs 2,010.61 lakh.
Advances have also come down during the same period from Rs 8,163.67 lakh to Rs 6,096.69 lakh, again a decrease of Rs 2,066.98 lakh.
The report stated there had been no fresh provision of Bad & Doubtful Debt Reserve (BDDR) for the year ended 31st March, 2020, stating “out of the total loss of Rs 6,347.14 lakh, the BDDR provisions stands at Rs 3,945.92 lakh”.
The Director’s report presented by MUCB Chairman Kishore Narvekar said the management of the bank and staff members have continued all efforts towards the recovery of NPA and have continued to adopt austerity measures to cut down on expenditure.
On the failure of bank’s merger proposals, the report pointed out that the Bank management did revive efforts for merger with other banks, namely TJSB Sahakari Bank Ltd, after the failure of merger prospects with PMC Bank, but the same could not culminate into a merger. “The efforts were further dented by the challenges thrown up by the economic uncertainty presented by the global pandemic and as such, currently there is not scope for merger,” the report stated.
On investments, the report said the bank was not able to generate any meaningful trading gains during the financial year due to challenging market conditions and rise in bond yields on account of unfavourable global and domestic factors.
The share capital of the bank has also decreased during the financial capital by Rs 2.91 lakh, i.e. from Rs 584.40 lakh to Rs 581 lakh, percentage decrease being 0.50 per cent.
While the total deposits of the bank stood at Rs 19,976.08 lakh, the Bank’s advances stood at Rs 6,096.69 lakh as on March 31, 2020.
While saying that the Bank continues to lay emphasis on recovery of over dues, the report said the Bank has been able to recover some chronic outstanding dues with the concerted recovery efforts.
Sources said the annual general body meeting scheduled on December 26 may turn out to be stormy given that beleaguered depositors have been repeatedly demanding the return of their deposits, questioning the logic behind the RBI’s directives barring withdrawal of their hard-earned money from the bank.
