- Pune-based Rupee Cooperative Bank was undergoing insolvency proceedings and will now be liquidated.
- It had already repaid over 64,000 depositors to the tune of ₹700 crore.
- RBI says 99% of the remaining depositors will receive a full refund of their deposits, with the remaining 1% losing any amount exceeding ₹5 lakh.
The Reserve Bank of India today announced that it has canceled the license of Pune-based Rupee Cooperative Bank, ordering it to cease banking operations from September 22, 2022.
Underlining the reasons for the cancellation of the bank’s license, RBI said that Rupee Cooperative Bank does not have “adequate capital and earning prospects”. This comes a few months after the bank’s proposed merger with Saraswat Bank fell through even after receiving in-principle approval from RBI.
questioned the viability of the merger after Rupee Cooperative Bank repaid over 64,000 people their deposits, totaling ₹700 crore.
Interestingly, in its order, RBI outlined that the continuance of Rupee Cooperative Bank would be against the interests of depositors and the public, and that the bank would be unable to repay its existing depositors in full in its current financial position.
What about existing depositors of Rupee Cooperative Bank?
Depositors holding money with licensed banks are insured for an amount of up to ₹5 lakh. RBI said that upon the liquidation of Rupee Cooperative Bank, existing depositors would be entitled to receive their deposit insurance claim from the Deposit Insurance and Credit Guarantee Corporation.
The order further states that more than 99% of the depositors are entitled to receive the full amount of their deposits. Nearly 1% of the depositors will end up losing any amount exceeding ₹5 lakh.
report had revealed that the Rupee Cooperative Bank has accumulated losses of ₹625 crore and liquidity of ₹823 crore.
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