HC stays co-op bank’s closure

Odisha Sun Times Bureau

Baripada, Oct 8:

The Orissa High Court has put a stay on the closure of Baripada Urban Co-operative Bank, till the next hearing.

The state government had decided to close down the bank on September 14 and appointed liquidator after Reserve Bank of India (RBI) had scrapped its licence in October 2014 when its local branch became bankrupt due to excessive non-performing assets (NPAs) like unpaid loans.

After this, the bank’s Board of Directors decided to move the High Court and approach Union Finance Minister Arun Jaitley against the decision.

The cooperative bank, one of the oldest in the State, had three branches – Udala, Rairangpur and Karanjia – which catered to the needs of the small and needy entrepreneurs in urban areas of the tribal-dominated district. Now, only the main branch here is operating.

The state government recently decided to liquidate the bank after it incurred huge losses reportedly due to large-scale corruption. The liquidator, appointed on September 14, has been asked to operate from Baripada and complete the liquidation process in two months.