8 cooperative banks go belly up

New Delhi: As many as 8 cooperative banks failed in this fiscal so far, resulting in credit insurance company DICGC paying a little over Rs 143 crore to depositors.

Among the eight cooperative banks, which failed to repay deposits to customers, four are from Maharashtra, three from Karnataka and one from Gujarat.

In the last financial year, 26 cooperative banks had closed operations.

Under the norms of Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India (RBI), a maximum of Rs 1 lakh is paid to a depositor in case a bank goes insolvent.

The Reserve Bank's credit insurance arm has paid over Rs 143.5 crore to depositors of eight cooperative banks which went bankrupt till July in 2011-12, according to DICGC.

The DICGC paid the maximum amount of Rs 48.7 crore to Ichalkaranji Cooperative Bank of Maharashtra. This was followed by another Maharashtra-based lender Samata Sahakari Bank whose depositors were paid Rs 38.83 crore.

Besides, the credit insurance company paid Rs 31.9 crore to depositors of Anyonya Cooperative Bank of Gujarat and also Rs 15.37 crore to the account holders of Vidharbha Cooperative Bank of Maharashtra.

At the same time, the insurer paid Rs 2.5 crore each to Laxmi Sahakari Bank of Maharashtra and Chadchan Sree Sangamehwar Urban Cooperative Bank of Karnataka.

Source: Financial Express