RBI imposes Rs 2.58 cr penalty on Swaminarayan Co-op Bank

The Reserve Bank of India (RBI) has imposed a penalty of Rs 2.58 crore on the beleaguered Swaminarayan Co-operative Bank (SCB) for maintaining inadequate statutory liquidity ratio (SLR) and cash reserve ratio (CRR). The central bank has issued a notice under Section 24 of the Banking Regulation Act.

Responding to the notice, the SCB custodian has sought a waiver on the penalty stating that the SLR and CRR could not be maintained as depositors had withdrawn their deposits at a time after the Madhavpura Mercantile Co-operative Bank (MMCB) went bust.

"We have received the notice from the apex bank body but we are not in a position to pay the huge amount as penalty. We are also responsible to pay back the deposits to respective depositors," said Arvind Patel, manager, SCB.

Meanwhile, it is learnt that no bank has come forward to take over the bank. In the last annual general meeting, the shareholders had approved the proposal to merge the bank with any other bank.

"It is a bank with wide deposits and depositors base. It is not easy to find a taker. The bank has deposits of about Rs 65 crore with MMCB and it is difficult to recover it," said Patel.

The bank has Rs 20 crore NPAs. The bank has deposits of over Rs 63 crore. About 90 per cent of the deposits are by the Depositors Insurance Credit Guarantee Corporation.