In April 2020, the RBI cancelled the licence to operate the Mapusa Urban Cooperative Bank as it had no adequate capital and earning prospects. Now the Madgaon Urban Cooperative Bank faces the same fate. Why?
The GCCI wants the government to extend the OTS to loan defaulters up to 2022. The reason: they say the cooperative and credit societies have agreed to waive the accumulated interest but not the 30-35% principal amount. The GCCI wants a formula to get this amount waived and afford time for the same up to 2022! How does the GCCI expect such banks to even waive off the accumulated interest and 30% principal amount? The interest waiving is because the government ‘forced’ these banks. Was this just? Did the banks obtain sanction from the shareholders?
Now, GCCI has been calling for a resumption of mining: surely, they must add that a provision be made before resumption to provide for both the loan repayment with interest by way of advances and to ensure no repetition at the time of mining deposits getting exhausted? But they don’t: why? The banks did not shut down mining. Yes, the managers erred by giving loans without due risk management. Where is the collateral security? Problems arise because the laws are bypassed. We need responsible people in the government and industry.
