Chairman says bank has dashed off letter to Apex bank for its decision on merger
MARGAO
Reserve Bank of India’s latest directions, extending the curbs on Madgaum Urban Co-operative Bank (MUCB) does not ring in good news for the bank or the depositors, leaving the bank management to pin hopes on the RBI to take a call on the bank’s request for MUCB’s merger with another bank.
With MUCB depositors anxiously waiting for the return of their deposits and the Bank’s monthly expenses pegged around Rs 20 lakh, officials as well as management says the earlier the call by the RBI, the better for the shareholders and depositors, whose hard earned money stands blocked in the bank.
Chairman of the Madgaum Urban Cooperative Bank, Kishore Narvekar has said extension of curbs on the bank does not offer any solution to the problems facing the bank and the depositors unless the Reserve Bank of India (RBI) takes the call on the bank’s merger with another bank.
In fact, Narvekar told The Goan on Thursday that the MUCB has already dashed off a letter to the RBI to take a decision on the merger of the bank with any other financially sound bank. “Since the government has now empowered the RBI to take decisions on the merger of banks, the MUCB has already written to the RBI to take an appropriate decision over the bank’s merger,” he said. The MUCB, however, has not received any reply from the RBI till date.
The RBI had on December 1 extended the restrictions imposed on the Madgaum Urban Cooperative Bank by a further period of three months. The RBI’s directions have come on Tuesday a day after the earlier directions was scheduled to end on Wednesday.
The Madgaum Urban Co-operative Bank was placed under directions vide Directive dated April 26, 2019 from the close of business on May 02, 2019 for a period of six months. The validity of the above Directions was extended from time to time, the last being vide Directive dated July 27, 2020 up to December 2, 2020.
Commenting on the status of MUCB’s offer to the PMC and TJSB Banks, Narvekar said the Board had taken the decisions to merge the Bank with either of these two banks, but in vain. “The proposal to merge MUCB with PMC came a cropper after the RBI imposed restrictions on the latter,” he said.
He pointed out that the MUCB’s discussions with TJSB bank had progressed to a great extent, but the COVID situation has left that bank to back out. “We had held several discussions with TJSB officials. There were hopes that the MUCB would finally merge with TJSB before COVID dashed off all hopes,” Narvekar said.
MUCB Managing Director, Kishore Amonkar said the MUCB has left the merger decision with the RBI as per the new law in place authorising the Apex Bank to decide on mergers. “Our request to merge the MUCB is pending with the RBI. May be the RBI has extended the curbs by another three months in order to take a decision on the bank’s merger,” Amonkar said.
He said the only way left for the RBI to decide on the future of MUCB is to merge the bank with any other bank or go for liquidation. “The earlier the decision, the better for the depositors, who have been anxiously waiting for the return of their deposits,” he added.
