Souharda co-op leaders made an impassioned appeal to Union Minister Amit Shah when he visited their headquarters, on the issue of stuck-funds of co-op societies in the beleaguered Sri Guru Raghavendra Sahakara Bank Niyamitha. “The involvement of DICGC is harming the case of co-op societies rather than helping them”, they pointed out with a lot of details.
The tale is a typical example of “Caught between devil and deep blue sea”. Co-op societies connected to the Karnataka State Souharda Federal Co-operative Limited (KSSFCL) parked money following the govt rule in the beleaguered bank. Now due to the tough repayment schedule proposed by the DIGCS, these co-ops are getting almost nothing and have nowhere to hide from the small depositors.
In their letter KSSFCL says “the deposits of 100 Co-operative Societies are stuck and hence the said Societies are not able to repay the deposit amounts to their members. KSSFCL has been fighting for the cause of the Co-operative Societies and its members who have deposited several Hundred Crores in SGRCB.”
“After several efforts made by KSSFCL, regulators and depositors, the DICGC has settled the depositors to the tune of Rs.5 Lakh each, on the condition that the said amount nearly Rs.729 Crores shall be repaid to DICGC by the Administrator/Liquidator in five instalments commencing from 31-12-2022 and the Administrator is about to repay about Rs.145 Crores at present to DICGC. Without repayment of depositors’ money, going to repay the DICGC amount also creates pressure on depositors”, reads the letter.
It further says “The DICGC have been insisting the payment of Rs 729 Crores as repayment of the amounts settled by DICGC to the depositors of less than Rs.5 Lakhs and this would in fact be out of the money of the depositors of deposits of more than Rs.5 Lakhs. It means practically none of the Co-operative Societies would get back their money.”
“Had there been no indulgence of DICGC or say no DICGC Act and if a bank goes under loss, depending upon the available resources of the Bank, all the depositors would have got back their money, in proportion to the quantum of their deposit amounts”, it says.
In the case of Guru Raghavendra Bank, all the depositors would have got back at least 30% of their deposits and now they won’t get anything because of the DICGC involvement, as it claims the amount paid by it as a debt, and claims the repayment on priority, they say seeking the Union Minister’s intervention in the matter urgently.
Co-operators such as G Nanjanagouda, B H Krishna Reddy and B S Gundu Rao have requested the Union Minister to extend the DICGC repayment time period up to the point of finding proper solution to the issue or full repayment of the depositors’ amount. They argue that to settle all the depositors amount by sanctioning loan to SGRCB from DICGC.
They also demanded that RBI be directed to Float Expression of Interest (EOI) for revival of the Bank and if revival is not possible, liquidate the bank and then settle the deposit proportionately after matching assets & liabilities of the bank.
Well appreciated article and the struggle of KSSFCL and Its present president G.Nanjangouda, past president B H Krishna Reddy, its Director B S Gundu Rao is well appreciated. We shall expect the same support by KSSFCL till the depositor socities get back their money
The DICGC should not apply rule of proportionate claims in the matter of investments of other Banks, FI, etc., First priority of payment should be given to institutional investors.