Metro Bank opts out of clearing house

Third bank to go out of the clearing house in on month

In yet another case of a co-operative bank going bust, Surat-based Metro Co-operative Bank Ltd has opted out of the clearing house.

The only difference between other co-operative banks and the Metro Bank is that the bank itself sought withdrawal from the clearing house.

Narahari Rao, president, Surat Bankers Clearing House told Business Standard, "We have received a letter from Metro Bank on Wednesday, in which the bank has sought withdrawal from the clearing house with effect from October 21. We have accepted the plea and proposed to the Reserve Bank of India to remove the Metro Bank."

"The Metro Bank did not have the liquidity and was not in a position to make adverse payments. For the last few days, the bank was having a heavy return percentage. The bank made adverse payment of Rs 7.77 lakh on Wednesday as well, but realised that it would not be able to meet the clearing liability from tomorrow onwards, and hence they have made the plea for withdrawing from the clearing house," Rao said.

"We have advised our member banks not to release credit under any circumstances against the clearing cheques /instruments drawn on Metro Bank," Rao added.

Metro Co-operative Bank is a single-branch bank, found in 1999. The total number of the bank's depositors is around 12,000. The bank's total deposits stood at Rs 16 crore, while it has a total loans and advances of Rs. 15 crore.

Earlier, Kamalkishore Kapuria, chairman, Metro Bank had said, "There is absolutely no problem at the bank. We are functioning as normal and there is no reason to worry for the depositors." Several efforts to contact him in the evening proved futile.