The Reserve Bank of India has extended directions issued to Pune based Rupee Co-operative Bank for a further period of three months from June 01, 2018 to August 31, 2018 subject to review.
The directions were originally imposed from February 22, 2013 to August 21, 2013 and were extended on eight occasions for a period of six months each and four occasions for a period of three months each.
The last extension was for a period of six months from November 22, 2017 to May 31, 2018.
Sources say in three months’ time the bank could make itself fit for merger with other banks as there have been no suitors coming forward. The bank’s current administrators say the bank’s revival rides on a liquidity infusion of Rs 600 crore.
Rupee Cooperative Bank has earned a profit of Rs 5.46 crore so far in 2018, compared to the Rs 16-crore in the last financial year. The bank has recovered Rs 42.80 crore and effected economy in utilizing its financial resources, according to media reports.
A source identified with the bank claims the bank has reduced the gap between its assets and liabilities from Rs 460 crore to Rs 440 crore.
The bank has downsized its workforce as well as cut down on the administrative cost. It has carried out strong measures to recover dues from defaulters as well as its past directors and executives by attaching their properties. The tie-up efforts with other banks have however failed to fructify so far.
Rupee bank has about 6.2 lakh depositors. The RBI has placed restrictions on the bank since 2013 owing to its poor financial health. It has losses amounting to a whopping Rs 1400 crore.
More than half of its employees have left under the voluntary retirement scheme and the bank has seen several set of administrators appointed by the government.
In the present case RBI has clarified that the issue of the directions by the Reserve bank should not, per se, be construed as cancellation of banking license by the Reserve Bank.
“The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these directions depending upon circumstances” RBI adds.
