Mapusa Urban Coop Bank has
lost close to Rs 2 cr: director
THE GOAN NETWORK
PANAJI
The Mapusa Urban Co-Operative Bank has lost close to Rs 2 crore in net income, which it could have earned, had the Reserve Bank of India (RBI) not debarred it from giving loans.
This was confirmed by Ramakant Khalap, Director of The Mapusa Urban Co-Op Bank.
The RBI had imposed this ban on bank in July 2015, as it felt that it had too little capital to carry on operations. More than 17 months after the said ban, the bank still cannot give loans and without that there is no fresh income accrued from interest.
The bank is earning interest on loans, which it had given before July 2015.
Khalap said that the bank would have made a net income of Rs 2 crore since July 2015 if it was allowed to give fresh loans. After the RBI announced the order in July 2015, the bank had taken this matter to the High Court where the case is still being heard.
The crux of the matter is bank has low capital base. To augment that it needs to infuse Rs 20 crore fresh capital. Khalap had earlier maintained that the bank has Rs 40 crore worth of non-banking assets like the unutilized space at its Mapusa Head Office.
However, to sell that the bank needs permission from the RBI. Meanwhile, demonetisation has made matters even more difficult for the bank. Khalap said, “All our branches, put together, collected Rs 20-25 crore in deposits ever since demonetisation was announced.”
The bank accepted deposits on which it has to pay interest to depositors, but it cannot give loans on which it could have earned interest. Khalap even mentioned that the mining ban, which resulted in a number of truck owners and barge owners not being able to pay their loans, made situation very tough for the banking sector.
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Box: RBI had earlier advised bank to sell assets to raise capital
• Reliable sources informed that the RBI had advised The Mapusa Urban Co-Op. Bank in 2012 to liquidate some assets to inject fresh capital.
• However, the bank did not do so, then. Later, in July 2015, the RBI issued an order, which debarred the bank from giving loans and accepting deposits.
• The bank went to the HC, which gave partial relief and allowed it to accept deposits.
• But, 17 months after RBI’s order, The Mapusa Urban Co-Op. Bank still can’t give loans.
