PUNE: The new four-member board of administrators of the Rupee Cooperative Bank has decided to give an “initial relief” of Rs 5,000 to depositors.
It would be a one-time payment until further orders. The relief would mostly apply to the depositors who have not withdrawn money even once after the Reserve Bank of India (RBI) put the bank under directions in February 2013.
The bank said the “initial relief” would settle the accounts of 4 lakh depositors because their “cumulative deposit was less than Rs 5,000.
The disbursement of Rs 5,000 is expected to start within a month’s time.”
“We shall review the position periodically and see if we can give more relief to depositors,” said Sudhir Pandit, chairman of the new board of administrators.
The new board was constituted on April 22. The other members of the board include Arvind Khaladkar, Vijay Bhave and Sadanand Joshi.
In February, RBI had directed the previous board to disburse Rs 20,000 to depositors subject to certain conditions. But in the absence of computerized core banking solution, most members were not in favour of it as they claimed “it would affect the liquidity of the bank and could be difficult to implement practically”.
Mukund Abhyankar, the chairman of the erstwhile board, resigned citing “personal reasons.” The other members also tendered resignations, but it was not accepted.
Pandit said, “It is our considered opinion that giving out Rs 20,000 to each depositor would weaken the bank’s position and its merger chances. Our aim is to protect every depositor of the bank and for that, we would need their continued support and trust.”
The bank stated that the implementation of Rs 20,000 deposit withdrawal directive would result into an outgo of Rs 388 crore. The bank has total cash reserves of Rs 700 crore and has already paid Rs 179 crore in hardship cases to select depositors.
The bank has total deposits of Rs 1,500 crore spread across 6,31,000 accounts. It has loans and interest outstanding of Rs 2,300 crore — Rs 360 crore in principal and the rest is interest. Under the liberalized one-time settlement scheme, the bank has managed to recover Rs 63 crore from non-performing accounts in a year. Pandit said another Rs 10-12 crore was expected in the next three months.