Yet another bank fails in India. Reserve Bank Of India (RBI) suspends the operations of Mumbai based 105 year Old “CKP Co-Operative Bank” and cancelled it’s licence citing unsustainablity . Established in 1915, it’s one of the oldest Urban Co-op Bank in Mumbai. RBI in its Press Release said ” The bank is not in a position to pay its depositors and the financial position of the bank is highly adverse and unsustainable.” Depositors will get upto Rs. 5 lakh as per Deposit Insurance And Credit Guarantee Scheme .
Recently we have seen failure of banks like PMC Bank and YES Bank. Yet another bank failed in a span of just few months. CKP Co-op Bank had 1,32,170 depositors. According to RBI about 99.2 percent of depositors of CKP Co-op Bank, will get their full deposits back under the deposit insurance and credit guarantee scheme (DICGC). That means approx 1058 depositor will not recieve the full amount of money depositied by them in the bank. Under DICGC , if any bank fails, a depositor is gauranteed to receive maximum of Rs.5 Lakhs.
CKP Co-op Bank has nearly 97 percent of Gross Non-Performing Assets (GNPAs). According to bank’s website it has 55 defaulters who has taken loans of more than 209 crores and had not returned back. Some of the names include Vijay Vaidya of Nanai Dairy and Avishkar Developers, Dinesh Shah of Labdhi Corporation, Dyandev Salunkhe of Siddharth Dairy and Phulchand Jagtap of Siddharth Dairy.
CKP Co-op Bank Ltd., Mumbai has been under All Inclusive Directions of RBI since 2014. RBI had prohibited it from taking deposits and giving new loans in April 2014 after it found lapses in its administration. Withdrawals were also capped.
Below is a copy of Press Release By RBI
The Reserve Bank cancelled the licence of the CKP Co-op Bank as
1. The financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible.
2. The bank is not satisfying the requirement of minimum capital and reserves as prescribed in Section 11 (1) read with Section 56 of the Act and capital adequacy and earning prospects as stipulated in Section 22(3)(d) of the Act and also stipulated minimum regulatory capital requirement of 9%.
3. The bank is not in a position to pay its present and future depositors, thereby not complying with Section 22(3) (a) read with Section 56 of the Act.
4. The affairs of the bank were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest. Thus, the bank has not been complying with provisions of Section 22 (3)(b) and (c) of the Act. T
5. The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations. No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further.
6.No useful purpose would be served by allowing the bank to continue as envisaged in Section 22(3)(e) of the Act. Rather, Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.Press Release By RBI