Mint Primer | Cooperative bank crisis: Has anything changed since PMC's plight in 2019?
Subscribe to enjoy similar stories. Another cooperative lender is now embroiled in an alleged fraud. Mumbai-based New India Cooperative Bank faces crippling curbs from RBI and its board has been dissolved, similar to what PMC Bank faced in 2019.
Has anything changed since then? Mint explains. On 13 February, RBI placed the lender under restrictions and directed the bank to not allow withdrawals from savings, current or any other deposit accounts. While directing depositors to bank officials and to India’s banking deposit insurance provider on how to claim their insurance payments against deposits of up to ₹5 lakh, RBI said the restrictions should not be seen as a cancellation of the bank’s licence.
A day later, uncertain over the future of their money, depositors rushed to branches of the bank in Mumbai. RBI also took control of the bank’s board and placed a retired banker to manage the operations. Read more: Govt to roll out credit rating for rural borrowers in six months It started in 1968 as the Bombay Labour Cooperative Bank—founded by former minister George Fernandes, and Ranjit Bhanu, whom the bank’s website refers to as a “noted criminal lawyer, trade unionist and a member of legislative assembly".
The bank held deposits of ₹2,436.4 crore as on 31 March 2024 versus ₹2,405.9 crore a year earlier, says its annual report. About 67.2% were fixed deposits, 27.9% savings deposits, and the rest current accounts. Loans fell 11.7% on-year to ₹1,174 crore.
Capital adequacy was 9.1% in FY24 against the required 10%. It has not met the minimum level for two fiscals now. Hindustan Times reported that the police arrested 57-year-old Hitesh Pravinchand Mehta, who worked as general manager-accounts, for allegedly siphoning money
. Read more on livemint.com
