99% of CKP Bank depositors to get their money back: RBI

Mumbai: You have said that of 1.3 lakh depositors, approximately 99.2% will get full payment of their deposits from the Deposit and Credit Guarantee Corporation.

On Saturday, the RBI announced that it had terminated the Co-op Bank license effective April 30 and asked the registrar of cooperative societies to initiate liquidation procedures and appoint a liquidator for the bank.

The 105-year-old cooperative bank had eight branches spread across Mumbai and Thane. Its name is an abbreviation of the Maharashtrian community that started the bank.

The cooperative on its website has said that 55 defaulting volunteers owe more than Rs 209 crore. He has named Vijay Vaidya of Nanai Dairy and Avishkar Developers, Dinesh Shah of Labdhi Corporation, Dyandev Salunkhe of Siddharth Dairy, and Phulchand Jagtap of Siddharth Dairy as the principal defaulters. Cooperative bank CKP has been under the direction of the RBI's all-inclusive since 2014. Since there was no scope for the revival of the RBI, its license has been canceled, a bank spokesperson said in a statement on Twitter.

This is the first time that the central bank activates the upper limit of deposit insurance, which came into effect after the Union Budget in February 2020.

According to the bank's website, its deposits amounted to Rs 485 million in November 2019, while outstanding loans were Rs 161 million. It had a negative net worth of Rs 239 crore due to default values.

“The bank's financial position is highly adverse and unsustainable. There is no concrete reactivation plan or a proposal to merge with another bank. Credible management commitment to recovery is not visible, ”said the RBI.

The bank is not in a position to pay its present and future depositors, so it does not comply with the law, the central bank said. Central bank officials said the bank could not be allowed to restart operations as it lacked the capital adequacy and minimum required reserves and there was no potential for profit.

According to the RBI spokesperson, the bank's affairs were and are being conducted in a manner detrimental to the public interest and the interest of depositors and that the general nature of the bank's administration is detrimental to the interest of depositors such as also the public interest.