MARGAO
In a major development, the Reserve Bank of India (RBI) has issued a notice to the Madgaum Urban Cooperative Bank (MUCB) to show cause within one month why the license issued to the bank should not be withdrawn and the bank liquidated.
The MUCB Board of Directors which met under the Chairmanship of Kishore Narvekar on Friday took stock of the situation arising out of the show cause issue by the RBI to the bank on license withdrawal.
‘The Goan’ also understands that the bank staff and employees also called on the Board on Friday with a plea that since the employees have set in motion the process of dialogue with the government, the MUCB board should also join the discussions in a bid to find a way out of the emerging situation.
Sources at the MUCB indicated that the bank will reply to the show cause notice within the one-month time period, and is likely to make a strong case to the RBI to explore the possibility of merging the cooperative bank with some other bank.
Sources informed that MUCB will make the merger plea before the RBI, pointing out that the Apex Bank had in the past facilitated the merger of banks.
While confirming that the MUCB has received the show cause notice from the RBI seeking withdrawal of the license and liquidation of the bank, Managing Director Kishore Amonkar said the bank will file an appropriate reply within the one month time-frame.
“The Board which met on Friday at the routine meeting took stock of the situation. The bank staff and the employees also called on the Board today with a plea to accompany them for discussions with the government”, he said.
Given that the Bank staff and employees have made a plea to the Board to explore the possibility of finding a solution with the government, the Board have decided to discuss the matter with the government.
The extended restrictions imposed on the bank by the RBI was scheduled to end on March 2, but with the show cause notice issued by the RBI, the restrictions may be deemed extended by another month, beginning from the date when the MUCB received the show cause notice.
The bank employees had last week called on the Chief Minister Pramod Sawant during his visit to the Ravindra Bhavan, Margao and had sought the government’s intervention to bail out of the MUCB.
Share holder Dionisio Sardinha, who is a petitioner in the High Court in the MUCB matter, said the MUCB board should explain and take the shareholders into confidence over the RBI show cause notice.
“The MUCB Board had last week tried to stop the shareholders from attending the adjourned general body meeting by holding a virtual meeting citing COVID restrictions. Let us wait and see whether the Board will hold a virtual or live meeting to resolve the bank impasse following the RBI show cause”, Sardinha pointed out.
