Mandi Urban Bank awaits RBI nod to restart operations

Shimla: With the financial health of Mandi Urban Cooperative Bank (MUCB) having improved, the government awaits a nod from Reserve Bank of India to permit the bank that was asked to suspend operations 7 years to start functioning again.

Papers laid in the Vidhan Sabha monsoon session that concluded on Wednesday revealed that RBI carried out a statutory inspection of MUCB under Banking Regulation Act for the year 2010-11 from 3rd to 9th August, 2011.

A proposal to RBI for relaxing or removing restrictions imposed on the bank was submitted in March and April, 2011 and a response for the request to resume normal banking operations was still awaited, chief minister Prem Kumar Dhumal who is also the state finance minister disclosed in the paper.

Financial position of the bank on 30th July, 2011 was shown that it had total deposits of Rs 29.47 crore and had investments of Rs 27.62 Cr.

MUCB with a share capital of Rs 2.1 Cr had reserves of 4.36 crore and the financial position of the bank was conducive for normal functioning of the bank, Dhumal stated.

Reserve Bank of India (RBI) had imposed a complete ban on withdrawal of money from the bank seven years ago after it detected misappropriation of funds and other large scale financial bunglings.

At the time of closure there were about 2600 depositors with the bank and non performing assets had crossed Rs 7.7 crore.

An RBI inspection then had revealed that loans had been advanced to employees and relatives of those in the management. Loans of even those not eligible were noticed to have been written off.

As Editor, Ravinder Makhaik leads a team of media professionals at Hill Post. Spanning a career of over two decades in mass communication, as a Documentary Filmmaker, TV journalist, Print Media journalist and with Online & Social Media, he brings with him a vast experience. He lives in Shimla.

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