Maharashtra seeks more time for co-op banks to get RBI licence

The Maharashtra government has written to the Union Finance Ministry seeking an extension of the March 31 deadline set by the Reserve Bank of India for 11 District Central Co-operative Banks and the State Co-operative Bank to obtain banking licence.

In an interaction with media persons at a State credit seminar organised by the National Bank for Agriculture and Rural Development (Nabard), the Chief Minister, Mr Prithviraj Chavan, said the deadline for obtaining banking licence should be extended by a few months.

The Rakesh Mohan Committee recommendations, which have been accepted by the Union Finance Ministry makes it mandatory for all the cooperative banks to get a licence before the March deadline.

Across the country, there are 134 banks which have not received the licences from RBI. If the banks are unable to get a licence, then they have to either become a cooperative credit society or merge with another bank.

In the State, the Maharashtra State Co-operative (MSC) Bank and 11 district central cooperative banks are functioning without banking licences. These banks either have a negative net worth or their Capital to Risk Assets Ratio (CRAR), is lower than four per cent.

Mr Pramod Karnad, Managing Director of MSC Bank, said that the bank could have a CRAR of more than 4 per cent by March 31 but it would require more time, so that it gets reflected in the balance sheet. It already has an adequate Cash Reserve Ratio and Statutory Liquidity Ratio, which are pre-conditions for getting the licence, he said.

He said that the bank has also started the process of selling assets of 18 sick sugar co-operatives, which have defaulted on loan repayments. From the sale of their assets about Rs 300 to 400 crore would be recovered. The bank has also raised a fresh demand of Rs 275 crore from Maharashtra government, so that the CRAR level reaches four per cent.