Mumbai: Eight cooperative banks, four belonging to Maharashtra, failed to repay deposits to customers during the first two months of the current fiscal, forcing the depositors to invoke insurance guarantee to recover a part of their losses.
About Rs100 crore were paid by the Reserve Bank of India’s credit insurance arm, Deposit Insurance and Credit Guarantee Corp. (DICGC), to the eight cooperative banks in April-May to settle the dues of the depositors.
Under DICGC insurance norms, a maximum of Rs1 lakh is paid to a depositor in case of failure of banks to repay the deposit. The maximum amount of Rs36.70 crore was paid to Prabhani Peoples Cooperative Bank Ltd, followed by Sriram Sahakari Bank (Rs29.80 crore), Purna Nagri Sahakari Bank (Rs4.75 crore) and Yashwant Sahakari Bank (Rs0.48 crore). All there banks were based in Maharashtra.
The other banks which failed during the current fiscal were Sindh Mercantile Cooperative Bank and Karamsad Cooperative Bank (both Gujarat), Mahila Nagrik Bank (Madhya Pradesh) and Kanyaka Parameshwari Cooperative Urban Bank (Andhra Pradesh), as per data released by DICGC.
During 2006-07, as many as 25 cooperative banks closed operations, resulting in a payout of Rs438 crore by the insurer.
Out of 25 banks that closed counters, 14 belonged to Gujarat, involving settlement claims worth about Rs236 crore. In percentage terms, both number-wise and value-wise, the state accounted for over 50% of cases and claims.
Prudential Cooperative Bank of Secunderabad was the biggest defaulter with a claim of Rs75.5 crore. The payment was made on 22 January.