4 yrs after Margao bank closure, Rs 40cr still stuck

Margao: More than four years after the Reserve Bank of India revoked its licence, at least 800 depositors of the defunct Madgaum Urban Co-operative Bank are still waiting to recover approximately Rs 40 crore in savings, with no clear timeline in sight for relief.The RBI cancelled the bank’s licence in July 2021, triggering liquidation proceedings in 2022. While the bulk of smaller depositors have since been refunded — the Deposit Insurance and Credit Guarantee Corporation (DICGC) sanctioned Rs 136 crore for claims up to Rs 5 lakh of which Rs 114.9 crore was disbursed as of July 2023 — those with larger deposits continue to wait. Many are pensioners, small businesspersons and ordinary citizens who entrusted their life savings to the bank.

As of July 2023, cooperation minister Subhash Shirodkar told the assembly that 11,282 depositors with amounts up to Rs 5 lakh were settled to the tune of Rs 127.2 crore, and the total liability to high-value depositors stood at Rs 42 crore. That figure remained largely unchanged.Sources associated with the Madgaum Urban Cooperative Bank said that the primary bottleneck is the inability to sell the bank’s properties.

The bank holds assets — its own as well as seized properties — valued at approximately Rs 30-40 crore across the state.Sources said that a proposal has been sent to the DICGC to temporarily disburse up to Rs 5 lakh each to the 800 large depositors, with the remaining balance to be paid later. If approved, it would provide at least partial relief. However, it remains uncertain when the DICGC will act on the proposal.With discontent mounting among those still awaiting their money, depositors are demanding that the liquidation process be expedited, with faster decisions on property sales and disbursal of pending amounts.