RBI to cancel licences of 26 loss-making cooperative banks

The Reserve Bank of India will shortly cancel licences of 26 loss-making cooperative banks, including 16 in Uttar Pradesh, Deputy Governor K C Chakrabarty today said.

A capital of Rs 2,000 crore is required for running 16 cooperatives banks in the state and RBI may not cancel the licenses of these banks if the state government supports them, Chakrabarty told reporters on the sidelines of an event here.

Banking is a business, he said and emphasised that it is better to close down such banks if there is no capital. Such cooperatives banks are not required anymore if 90 per cent of depositors' money has been lost, he added. Chakrabarty further said that these cooperatives banks should be shut down as they have been given many chances to perform well keeping in mind the interest of the investors. On the new banking licences, he said RBI will consider giving permits to those who submit applications by June.

On usage of fifty paise coin, Chakrabarty said that these coins are still in circulation. RBI may consider stopping its circulation if substantial complaints are received. He also said that plastic notes will be launched in four metro cities as a pilot project. Based on its success, it will be expanded to other parts of the country. To another query, Chakrabarty said that the government provides subsidy to the tune of Rs 50,000 crore on cooking gas and to the tune of Rs 5,00,000 crore under other heads,