Madgaum Urban hopes for merger by month-end

Panaji: With just over a month left to finalise a merger with another cooperative bank, Madgaum Urban Cooperative Bank’s discussions with the Thane Janata Sahakari Bank have yet to reach a conclusive end. While the bank’s officials seem confident about pulling off a last minute deal, state government officials are worried that the bank will follow the fate of the Mapusa Urban Co-operative Bank.
In April alone the Reserve Bank of India cracked down on nine co-operative banks, including the Mapusa Urban Cooperative Bank, which lost its banking licence on April 17.MUCB’s path to liquidation came five years after the RBI imposed sanctions on it due to inadequate capital and earning prospects.
A similar fate awaits Madgaum Urban Cooperative Bank, which has till August to merge with another bank in order to avoid liquidation.
“Now either they have to get capital infusion, which is out of the question here, or they have to merge with another healthy bank,” said registrar of cooperative societies Vikas Gaunekar.
Co-operative banks face the issue of dual regulation, intervention by local politicians and lack of professional management. Vice chairman of Madgaum Urban Cooperative Bank Rupesh Mahatme insisted that by the last week of July, the bank will have a final merger proposal to present to RBI.
“We have to submit final proposal by August but by the last week of July we will have it ready,” said Mahatme. He said that the bank, which has nine branches and 85 staff is focusing on recovery from defaulters.