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Corporation Bank drops plan to acquire Rupee Bank

Corporation Bank has decided not to take over the ailing Pune-base cooperative bank Rupee Cooperative Bank, according to a senior official of the bank. Rupee Cooperative Bank has accumulated losses of Rs 652 crore and has been under an RBI-appointed administrator for the last two years. Apart from Corporation Bank, Punjab National Bank and Allahabad Bank were also looking at the prospects of taking over the bank, which has some 36 branches across Maharashtra. While depositors are permitted to withdraw Rs 1,000 a month, the administrator of the bank said 17,000 of them were allowed to withdraw a total of Rs 54 crore under four categories of the “hardship” clause of the RBI. According to reports, Corporation Bank had an issue with the existing staff of the cooperative bank, numbering around 900. The bank was willing to absorb 600 of them and was examining whether RBI will allow it to offer VRS to the rest. According to sources, the state government is also examining the viability of allowing another cooperative bank in the state to run Rupee Cooperative Bank without a merger.

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