Mapusa Urban Co-op Bank set to sell Rs 40 cr NPAs

The Mapusa Urban Co-operative Bank is all set to raise funds amounting to Rs 40 crore from the sale of its non-performing assets (NPAs), said chairman of the bank Gurudas Natekar on Tuesday. The Rs 40 crore will be adequate to boost the share capital of the bank and be compliant with the capital adequacy norms of the Reserve Bank of India (RBI), he said.
Speaking to ‘The Navhind Times’ on the chances of the bank coming out of the restrictive orders imposed under Section 35A in 2016, Natekar said that although the restraining order still continues and the matter is in court, the bank is optimistic of getting it lifted in this year.
“One of the instructions of the RBI was to raise funds through the sale of non-performing assets which we are ready to do,” he said.
Bids and tenders for the sale of the non-performing assets have already been prepared and RBI’s consent is awaited for the sale, he said. “The restrictive order was imposed by the RBI for a period of six months and with the period ending on January 26, 2016, we are hoping for a favourable review,” said Natekar. The bank, he added, has made considerable progress in improving its finances since the order was imposed.
On July 24, 2015, the RBI had slapped an embargo order on the bank preventing it from carrying out regular banking activities including withdrawal of money, lending, accepting deposits, investing, etc. The order was challenged in the High Court of Bombay at Goa and subsequently some of the restrictions were relaxed. The High Court allowed the bank depositors withdrawal of amount not exceeding the net outer limit of Rs 25 crore. For individual account holders having balance in their account of more than Rs 1,00,000, they are permitted to withdraw 25 per cent.
In September 2015, the bank’s governing board held fresh elections with Ashwin Khalap, chairman, stepping down and a new board taking charge. Natekar was elected as the new chairman and Pradnay Naik as the vice chairman.
The bank needs about Rs 20-22 crore to improve the financial condition and the board plans to do it by collecting unrecovered loans from defaulters by taking over their property and auctioning the NPAs. All these measures are expected to yield Rs 40 crore.
The Mapusa Urban Co-operative Bank has about 2,82,000 accountholders and 1,19,000 shareholders. As on March 2015, the bank h