26 co-operative banks go belly up in 2010-11

New Delhi: As many as 26 co-operative banks failed in 2010-11 which resulted in credit insurance companies paying over Rs 268 crore to depositors.

26 co-operative banks, which include 10 from Maharashtra, six from Gujarat and five from Karnataka, have failed to repay deposits to customers during the last fiscal.

In 2009-10, 29 cooperative banks across the country had closed operations.

Under the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the the Reserve Bank of India (RBI), insurance norms, a maximum of Rs one lakh is paid to a depositor in case the bank goes insolvent.

The Reserve Bank's credit insurance arm has paid over Rs 268 crore to depositors of 26 co-operative banks which went bankrupt in 2010-11.

The DICGC paid the maximum amount of Rs 45.43 crore to Ahmedabad Peoples Cooperative Bank of Gujarat. Other Gujarat-based lender Shri Sinnar Vyapari Sahakari Bank got Rs 40.66 crore, Surendranagar Peoples Cooperative Bank (Rs 30.74 crore) and Surat Mahila Sahakari Bank (Rs 26.44 crore).

Besides, the credit insurance company paid Rs 16.92 crore to depositors of Rahuri Peoples Cooperative Bank of Maharashtra and also Rs 15.24 crore to the account holders of Katkol Cooperative Bank of Karnataka, according to RBI.

At the same time, one each from Uttar Pradesh, Assam and Andhra Pradesh also closed operations.

Source: Financial Express