Maharashtra to bring in law to safeguard small savers in co-op banks

Mumbai: The Maharashtra government will come up with a law to protect small savers who have deposited up to Rs 1 lakh in urban cooperative banks (UCBs), a minister has said.

Most of the UCBs have small deposit amounts and savers are adversely affected whenever these banks face financial constraints, Cooperation Minister Subhash Deshmukh has said.

He was speaking at a meeting of representatives of UCBs in Pune on Thursday. The meeting was called to discuss measures to protect deposits in such banks.

"Deposits up to Rs 1 lakh in UCBs will be protected with some legislation. The state government is working on it. We are working on some mechanism through the Maharashtra Cooperation Development Corporation. It would frame guidelines and rules for UCbs to bring some uniformity," Deshmukh said.

He said there are nearly Rs 25,000-crore deposits in the urban cooperative banks in the state.

In the last 10 years, several UCBs have undergone financial crisis, especially after the Reserve Bank placed some of them under moratorium.

"The government will extend support to the UCBs as they cater to the weaker sections. We will work out some legislation for it," Deshmukh said.