The registrar of cooperative societies at Mumbai has begun the process of deregistration of cooperative banks, which have remained non-functional for over 10 years, with no sign of revival, under the provisions of the Maharashtra Co-operative Societies Act, 1960.
Under section 84 of the above act, the books of the indebted society are inspected and under section 103, a liquidator is appointed to take stock of the liabilities, assets, and depositors’ claims as part of the wind-up procedure. Now the respective deputy registrars of cooperative societies from Mumbai have been asked to submit reports by the current month-end to the commissioner, cooperatives so that further action can be taken.
The Reserve Bank of India (RBI) has already cancelled banking licences of these banks. Some of the banks facing deregistration include: Metropolitan Co-operative Bank Ltd, Mumbai (date of liquidation by RBI -20 June 1992), Chetna Co-operative Bank Ltd., Mumbai (date of liquidation 1 December 1994), Swastik Janata Sahakari Bank Ltd., Mumbai (date of liquidation -14 December 1994), Mafatlal Engg. Employees Co-operative Bank Ltd., (date of liquidation – 31 March 2002), Vinkar Sahakari Bank Ltd., Mumbai (date of liquidation -24 August 1998), Awami Mercantile Co-operative Bank Ltd., Mumbai (date of liquidation -6 January 1999), Ravikiran Urban Co-operative Bank Ltd., Mumbai (date of liquidation -15 January 1999), Indira Sahakari Coop Bank Ltd., Mumbai (date of liquidation -29 June 1999), Dadar Janata Sahakari Bank Ltd., Mumbai, (date of liquidation -26 February1998), Maratha Market Peoples Co-operative Bank Ltd., Mumbai(date of liquidation -14 August 2000), Friends Co-operative Bank Ltd., Mumbai (date of liquidation -8 August 2001), Western Co-operative Bank Ltd., Mumbai (date of liquidation -20 December2001), Shree Labh Co-operative Bank Ltd., Mumbai (date of liquidation -13 August 2002), Yeswant Sahakari Bank Ltd. Mumbai (date of liquidation -7 March 2003), Swami Samarth Coop Bank, Mumbai, Raghuvanshi Coop Bank, Mumbai and Parivartan Coop Bank, Mumbai.
Of these, all the depositors of Raghuvanshi and Parivartan are eligible to get their claims up to Rs1 lakh from the Deposit Insurance and Credit Guarantee Corporation (DGCGC).
These banks fall under the jurisdiction of the district deputy registrar (DDR) I, II and III. The process to deregister these banks is on DDR III, Mahendra Mhaske, district deputy registrar said.
With 4,839 branches and 1,576 ATMs, cooperative banks have made their presence felt in every nook and corner of the state. In rural areas, cooperative banks are the only banks available to a large section of population. The RBI and commissioner of cooperatives have joint control over these banks.
Maharashtra has a 32% share of co-operative banks in the country. Of the 1,618 urban coop banks in the country, 526 urban banks are in Maharashtra. As of now, nearly 106 coop banks are facing liquidation and another 10 are under the control of administrators. The coop banks, have stated to have non-performing assets to the tune of 10-15% and total deposits in these are to the tune of Rs1,73,800 crore, which accounts for 68% of deposits in such banks in the country. Besides, the cooperative banks in Maharashtra have issued loans to the extent of 65% of loans given by cooperative banks in the country.
As such the financial health of coop banks in Maharashtra is suffering. Mismanagement, lack of professional handling and political interference has hurt cooperative banking in the state. Besides, demonetisation of bank notes in November 2016 has crushed the backbone of most of the coop banks in the state.