MARGAO
The Madgaum Urban Cooperative Bank is back in the news.
This time an audit of the financial statements of the Urban Cooperative bank as on March 31, 2020 has revealed that the bank’s accumulated losses touched around Rs 63.47 crore.
That’s not all, the audit report has observed that the bank has not been able to make profit due to restrictions on the smooth functioning of its business activities. The report has pegged the total accumulated losses to Rs 63.47 crore as on March 31, 2020.
The report further observed that since the bank is placed under supervision restrictions by RBI under section 36(1) of Banking Regulation Act, 1949 with effect from November 2009, it has hampered the earnings capacity of the bank “There has been erosion of the net worth due to huge accumulated losses”, the report added.
MUCB Managing Director Kishore Amonkar told The Goan that the audit report has to be conducted every year before the meeting of the general body of the shareholders. “This statement of accounts will be placed before the general body of shareholders as and when it is held”, he said.
The MUCB has already come under the scanner of the Reserve Bank of India, with the Apex bank imposing restrictions on the bank on withdrawals of deposits by the depositors. Though the RBI’s restrictions were schedule to end in August, the RBI has given further lease of life for the Bank till December.
Since last year, the MUCB was barred by the RBI from allowing depositors to withdraw beyond the prescribed limit. Earlier, the RBI had restricted the Bank from sanctioning loans after its capital to risk asset ratio portfolio fell drastically during the financial year ending March 31, 2015.
At the last general body meeting, beleaguered shareholders had demanded the return of their deposits, while the Board of Directors had assured the depositors that the management would explore the possibility of merging the bank with two Maharashtra-based banks.
While one of the banks proposed for merger with MUCB came under scanner of the RBI, discussions and negotiations with another bank, TJSB Bank could not be taken to the logical conclusion during the intervening Covid-19 pandemic.
In the meantime, depositors from Curtorim and surrounding areas have demanded that the MUCB allow them to withdraw at least Rs 50,000 till December in times of Covid pandemic, but the proposal has till date not found favour with the Reserve Bank of India.
