The Rupee Sangharsh Samiti, an association of depositors of the Rupee Co-op Bank Limited, recently approached the Bombay High court seeking urgent relief of stay on the August 8 order of Reserve Bank of India (RBI), which cancelled its banking licence.
The petitioner challenged the decision of the appellate authority — Department of Financial Service (Banking Division), Ministry of Finance – which turned down its appeal against the Central bank’s order. HC had suspended the RBI order till October 17 when the appellate authority was asked to dispose of the appeal.
On Thursday, after the petitioners were informed about the November 1 letter of the RBI directing a liquidator to take charge of the bank pursuant to the dismissal of the appeal, the court granted liberty to petitioners to file an application challenging the order.
A vacation bench of Justice Gauri V Godse was hearing the association’s plea argued through advocate Avinash H Fatangare and Archana S Shelar.
Senior advocate Shailendra U Kamdar for RBI informed the bench that the appeal by the appellate authority has been dismissed on October 31 and pursuant to dismissal, the RBI, on November 1, had issued a letter after which the liquidator has taken charge of the bank.
The petitioner’s counsel sought liberty to take out an appropriate application in view of the November 1 development, which the court allowed. The amended plea will be heard in due course.
Notably, another bench of HC had, on September 22, suspended the August 8 RBI order pending disposal of appeal before the appellate authority. The authority dismissed the same on October 31.
Justifying its order, the RBI had said that there was 85.93 per cent deposit erosion as on March 31 while the gross non-performing assets (NPAs) of the bank stood at Rs 285.42 crore. The court noted that there had been no improvement in financial position of the bank even after nine years from the imposition of operational instructions.
If the petitioner is allowed to carry on its business any further, it would adversely affect the public interest, the RBI had argued.