PANAJI
Due to this directive , the bank has not been able to earn fresh interest income, which has severely affected the financial viability in the last two years. The director of The Mapusa Urban Co-operative Bank, Ramakant Khalap, said, “Our annual salary bill is around Rs 12 crore. It’s a cause of worry to us.”
When asked whether the bank will retrench employees if not allowed by the RBI to issue fresh loans, Khalap replied, “We have already rationalised our employee strength. The total number of employees has come down to 200 from 400 which was some 4 to 5 years ago. This was primarily due to implementation of core-banking solution and other computerisation we did,” adding that there have been no fresh recruitments in the last 15 years. The situation for The Mapusa Urban Co-Op Bank remains precarious even as the matter is still being heard by the High Court.
Sources at the Reserve Bank of India (RBI) had earlier revealed to The Goan Everyday that these restrictions were imposed because The Mapusa Urban Co-Op Bank had insufficient capital.
To this, Khalap replied, “We have Rs 60 crore worth of assets like unutilized space at our Mapusa Head Office, Panaji branch space and other branches. We have requested the RBI to allow us to sell the same so that we can augment our capital base. However, the RBI has still not allowed the bank to do so.”
Meanwhile, Khalap also said that another way to increase capital is to go for one-time-settlement (OTS) for large number of loan cases pending in courts.
Even for that, The Mapusa Urban Co-Op Bank will require RBI’s permission. Talking about the bank’s financial position, Khalap said, “Our share capital stands at Rs 26 crore.
The accumulated losses stood at Rs 55 crore as on March 31, 2017. The gross non-performing assets (NPAs) stands at Rs 25 crore, which were around Rs 150 crore some 7-8 years back.”
Even as the gross NPAs have come down for the bank, but its accumulated losses are huge compared to its share capital.
The capital base of the bank can be augmented only if it is allowed to sell its assets.
The RBI has not given it permission to liquidate these assets in the last two years. It remains to be seen what the HC will decide in this case. Khalap also said that this matter is listed at the High Court for this fortnight.
