The Reserve Bank of India has put 42 cooperative banks under a
revival programme that involves a thorough scrutiny after the lenders
failed to meet critical parameters on minimum capital and net worth.
RBI has barred the lenders from accepting fresh deposits from the public after they missed the 31 March deadline to satisfy the norms.
The programme, known as the monitorable action plan (MAP), is a last-ditch effort by the central bank to revive the businesses of distressed banks.
The banks have till 30 September to revive their businesses and improve capital adequacy.
During this period, the operations of the banks and their business decisions will come under scrutiny. If the banks fail to revive their businesses, the regulator can take punitive action or even cancel their licences.
Of the 42 district central cooperative banks under scrutiny, 25 are in Uttar Pradesh.
Special committees comprising top officials of RBI and the National Bank for Agriculture and Rural Development (Nabard) will monitor the monthly progress of the banks.
"There were about 50 banks which were facing closure threat. Of them, eight, including state-level cooperative banks, have managed to meet the norms. The remaining 42 banks are under MAP till September to work out a revival plan," Prakash Bakshi, chairman of Nabard, said.
Most of the banks have already submitted their action plans, he added.
If the banks are unable to improve their positions by September, they may be asked to either shut their operations or merge with other banks.
The 50 cooperative banks that faced the threat of closure had total deposits of Rs. 31,242 crore and loans worth Rs. 18,485 crore as of 31 March 2011. These lenders accounted for 13.5% of the total deposits of state and district central cooperative banks in the country.
Updated figures for the 42 banks could not be obtained immediately. Mint had reported this development on 14 March.
RBI has barred the lenders from accepting fresh deposits from the public after they missed the 31 March deadline to satisfy the norms.
The programme, known as the monitorable action plan (MAP), is a last-ditch effort by the central bank to revive the businesses of distressed banks.
The banks have till 30 September to revive their businesses and improve capital adequacy.
During this period, the operations of the banks and their business decisions will come under scrutiny. If the banks fail to revive their businesses, the regulator can take punitive action or even cancel their licences.
Of the 42 district central cooperative banks under scrutiny, 25 are in Uttar Pradesh.
Special committees comprising top officials of RBI and the National Bank for Agriculture and Rural Development (Nabard) will monitor the monthly progress of the banks.
"There were about 50 banks which were facing closure threat. Of them, eight, including state-level cooperative banks, have managed to meet the norms. The remaining 42 banks are under MAP till September to work out a revival plan," Prakash Bakshi, chairman of Nabard, said.
Most of the banks have already submitted their action plans, he added.
If the banks are unable to improve their positions by September, they may be asked to either shut their operations or merge with other banks.
The 50 cooperative banks that faced the threat of closure had total deposits of Rs. 31,242 crore and loans worth Rs. 18,485 crore as of 31 March 2011. These lenders accounted for 13.5% of the total deposits of state and district central cooperative banks in the country.
Updated figures for the 42 banks could not be obtained immediately. Mint had reported this development on 14 March.
Comments
Post a Comment