the goan I network
MARGAO
The Reserve Bank of India has barred the Madgaum Urban Cooperative Bank from granting or renewing any loans and advances, make any investment, incur any liability including borrowing of funds and acceptance of fresh deposits without the prior approval of the Bank.
Customers will be allowed to withdraw a sum not exceeding Rs 5000 in every savings bank or current account or any other deposit account.
Issuing Directions under section 35A of the Banking Regulation Act, the RBI has further barred MUCB from disbursing or agreeing to disburse any payment whether in discharge of its facilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer any of its properties or assets.
While imposing a ban on the withdrawals by the customer, capping the ceiling to Rs 5000, the RBI, however, said the MUCB may renew the existing term deposits on maturity in the same name and same capacity.
The Bank is allowed to incur expenditure in respect of salaries of employees; rent, rates and taxes; electricity bills; printing and stationary; postage; legal expenses comprising stamp duty/registration charges/arbitration fees, which are payable at rates stipulated in the concerned statute or rules; court fee in compliance with court orders; payment of fees to lawyers not exceeding Rs 5000 per case.
The RBI has also allowed the bank to incur expenditure on any other item in so far as it is in the opinion of the bank necessary for carrying on the day-to-day administration of the bank provided the total expenditure on any item in the calendar month shall not exceed the average monthly expenditure on account of that time during the period of six months preceding the date of the direction.
The bank has been allowed to set off loans against deposits if the terms and conditions of the loan agreements with the borrower provide that the amount in his specific deposit account may be appropriated/adjusted by the bank towards his loan account.
The RBI has asked MUCB to forward a copy of the directive to each depositor and also displayed it on the home page of the bank’s website
Directions were also issued to MUCB to submit to General Manager, RBI, Panjim statements relating to operations.
These directions shall remain in force for a period of six months from the close of business on May 2.
MUCB merger plan on cards
MARGAO: With the proposal seeking government’s funding to revive the bank having come a cropper, the Madgaum Urban Cooperative Bank has mulled merger with two other banks.
Bank Managing Director Kishore Amonkar told The Goan that though the Bank had decided to go in for a merger in January, the proposal was kept on hold anticipating govt’s support to the Bank’s revival plan. “We had pinned our hopes on former CM Manohar Parrikar. Our plans did not materialize after his demise. The latest RBI directives mean there’s no more”, he added. “We had approached two banks. The process had started. The two banks have in principle agreed”, he added.
Saying that the money of customers is safe, the bank MD said “the bank has enough money and its safe. Because of NPA, the RBI has put the sanctions on the bank”.
