RBI could have given some more time to find a way out of present crises, says MUCB former director

PANJIM: With Mapusa Urban Cooperative Bank (MUCB) licence for banking cancelled by Reserve Bank of India (RBI), the customers even though assured of their money and deposits will be returned, are in a very sombre mood. 

Many of the bank customers even though having faith in the bank blamed the “politics”, which ultimately led to the suffering of the common people who trusted in the bank and deposited their lifetime savings.

It is well known that the bank was under the direction of RBI vide Section 35A for almost five years for failing to comply with certain criteria and the norms laid out by the RBI, including capital adequacy. Due to this Section 35A, the bank was unable to conduct any business for the last five years which further crippled the functioning of the bank. 

“The MUCB is one of the oldest cooperative bank in the State and the bank has been facing this difficulty due to the non-performing asset (NPA) provisioning that had to be made as per the latest RBI guidelines. The RBI had imposed directions under Section 35A on the bank for the last five years for failing to meet some of their criteria and capital adequacy norms,” said Tulio De Souza, former director of MUCB. 

He further added that, “the bank management has been trying its best to find out a solution to this issue plaguing the bank with the help of the State government and the RBI. We were surprised to receive this letter on withdrawal of licence during the COVID-19 lockdown period. It is widely felt that looking at the bank financials the RBI could have allowed some more time to the bank to find a way out of this present crisis.”  

Customer of the bank and advocate from Mapusa Amit Sawant is of the opinion that the imposition of Section 35A by the RBI on the MUCB has restricted many customers for the last five years. 

“After five long years what have you gained? The licence was cancelled. Had this been done earlier it would have been welcomed. At this time when our economy is down and we have lockdown due to COVID-19 pandemic, it has hit the common man more. It looks like a political revenge. The management is not at all affected and they have not been booked under single case. It is the common man which is suffering. If there had been willingness to improve the status of the bank it could have been done,” said Sawant.

Jerry Braganza, a resident of Mapusa, who had been in the construction business earlier felt disheartened. 

“The money is gone. What can I say? It is all mismanagement. The bank and the RBI say that up to Rs 5 lakh is insured but what happens to the balance thereafter? All have to be blamed for this whether it is the bank management, RBI or the State government. What happens to the villagers and retired people who have no source of income?” asked Braganza.

However, Shrikrishna Anvekar, another customer believes that the bank is good and is confident that they will get their money back. 

“Talks are on and we will get the good news in 3-4 days. The bank is good and I am confident we will get our money back. I am sure that the RBI will sort this out expeditiously,” said Anvekar.

MUCB has been mired by political controversy since it was established on December 9, 1965.  The bank has 24 branches with 190 employees.