Monday, 4 May 2020

RBI cancels CKP Cooperative Bank's licence


4/5/2020

PUNE: The Reserve Bank of India (RBI) has cancelled the license of CKP Cooperative Bank Ltd., with operations mostly in Pune and Mumbai, and initiated a liquidation process. The bank has been under restrictions imposed by the regulator since 2014. In a release, the RBI said the bank’s licence was cancelled with effect from April 30. The Registrar of Co-operative Societies, Pune has been requested to issue an order for winding up and appoint a liquidator for the bank. 

As per information available on the bank’s website, it holds deposits of Rs 485 crore and outstanding loans of Rs 161 crore. The bank has a negative networth of Rs 239 crore. Established in 1915, CKP claims to be one of oldest urban cooperative banks in Mumbai. The decision to liquidate the bank was taken as the financial position of the bank is “highly adverse and unsustainable,” the RBI said.

There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible. The bank does not satisfy the requirement of minimum capital and reserves. It is also not in a position to pay its present and future depositors. The affairs of the bank were and are being conducted in a manner detrimental to the public interest and interest of the depositors. 

The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations. No merger proposal has been received in respect of the bank. Once the bank is liquidated, its depositors will be able to avail the recently hiked deposit insurance limit of Rs 5 lakh. Until February this year, the deposit insurance was capped at Rs 1 lakh. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions.

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