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Money > Business Headlines > Report May 9, 2002 | 0745 IST |
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RBI cancels Hyderabad co-op bank licenceBS Bureau The Reserve Bank of India has cancelled the licence of the city-based First City Co-operative Urban Bank Ltd. The bank is precluded from transacting the business of banking. It can neither accept deposits from public nor allow withdrawals by cheque, draft, order or otherwise as per the RBI order. First City is the fourth co-operative bank in the State to lose its licence in the recent past. With only one branch located in the old city, First City has a deposit base of Rs 68.3 million. It is not in a position to repay the deposits since 80 per cent of its Rs 110 million advances falls under NPA category. Its equity base is Rs 19.6 million. The expert committee appointed by the State government, following a series of scams unearthed in the co-operative banking sector in the state, has already recommended criminal proceedings against the directors and key executives of the First City Urban Co-operative Bank. The expert committee identified it as an unviable bank. The expert committee headed by Narasimha Murthy, a chartered accountant and also the director on the boards of IDBI and UTI Bank, in its interim report has reviewed the functioning of 44 weak co-operative banks in the state. Of the 44 co-operative banks, five have been classified as viable and their managements were certified as sincere, while fourteen banks were found to be requiring funding support with sincere management at the helm of affairs. Seven banks were rated by the committee as viable but run by insincere managements. Managements of eighteen banks were labelled as insincere with the banks' financials too in poor shape. First City Urban Co-operatives Bank falls under the last category. A total number of 158 urban co-operative banks in the state have mopped up an estimated Rs 40 billion as deposits, the fourth highest in the country. The Reserve Bank of India has officially identified 43 of the 158 co-operative banks as 'weak.' ALSO READ:
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