NT NETWORK

Margao

The Madgaum Urban Co-operative Bank Ltd (MUCB) has been issued a show cause notice by the Reserve Bank of India (RBI) giving them a month’s time to respond on why its license should not be withdrawn and begin liquidation of the bank that has been under sanctions since 2019.

Earlier this week, the RBI issued a show cause notice to MUCB after granting it several extensions over three and six month periods since 2019 and have asked the bank to respond within one month as to why their bank license should not be withdrawn and begin the process of bank liquidation. The latest extension in sanctions will end on March 2.

Following the show cause notice, the board of directors met on Friday to discuss the status of the situation and have decided to respond to the notice within the one month period granted.

Earlier the bank had put up plans of merging with the Thane Janata Sahakari Bank (TJSB) and the Punjab and Maharashtra Cooperative Bank (PMC), both of which have now been abandoned. However, shareholders at a meeting in December last year suggested that the bank should explore options including that of merger with the state’s own Goa State Cooperative Bank.

During December’s meeting, it was also informed that Rs 20 crore had been recovered from pending loans and the remaining amount of Rs 60 crores had yet to be recovered. The bank had also informed the RBI of its failure to merge with other banks and had reached out to the finance ministry to explore other
options.