The Rupee Cooperative Bank, which has its headquarters in Pune, has had its licence revoked by the Reserve Bank of India, which also gave the bank until September 22, 2022 to stop conducting banking business.
Rupee Cooperative Bank does not have "sufficient capital and earning potential," according to the RBI, which highlighted the reasons for the revocation of the bank's licence. This comes after the bank's proposed merger with Saraswat Bank failed to materialise after gaining RBI's in-principle clearance. After Rupee Cooperative Bank returned deposits worth 700 crore to over 64,000 customers, Saraswat Bank questioned the feasibility of the merger.
It's interesting to note that the RBI stated in its ruling that Rupee Cooperative Bank's continued existence would go against the interests of depositors and the general public and that the bank would not be able to fully repay its existing depositors given its current financial situation.
Depositors' funds are covered up to a maximum of 5 lakh when they are kept in authorised banks. According to RBI, current depositors would be entitled to obtain their deposit insurance claim from the Deposit Insurance and Credit Guarantee Corporation following the closure of Rupee Cooperative Bank. More than 99% of the depositors are entitled to collect the full amount of their deposits, according to the order. Any amount greater than Rs. 5 lakh will result in the loss of nearly 1% of the deposits. According to a recent report, the Rupee Cooperative Bank has accrued losses totaling 625 crore and liquidity of 823 crore.