The Margao-based cooperative bank came under the RBI’s lens after it failed to adhere to Capital Adequacy Ratio (CAR) norms and struggled with loan recovery and defaults. On April 26, 2019, RBI announced sanctions on the bank for a period of six months beginning from May 2.
“The directive dated April 26, 2019, issued to The Madgaum Urban Cooperative Bank Ltd., Margao as modified from time to time, the validity of which was last extended up to December 2 shall continue to apply to the bank for a further period of three months from December 3 to March 2, 2021, as per the directive dated December 1 subject to review,” said chief general manager Yogesh Dayal.
The financial restrictions imposed on the bank were last extended till December 3. Shareholders and depositors remain concerned about the safety of their deposits as they fear that the bank could be the second in the state to lose its banking licence.RBI cancelled the banking licence of Mapusa Urban Cooperative Bank of Goa (MUCB) in April and has already initiated liquidation proceedings.
Madgaum Urban has nine branches and 85 staff and has initiated proceedings to recover dues from defaulters. The bank has about 54,000 depositors but most of the customers can no longer deposit or withdraw funds from their accounts.