Depositors of Bengaluru-based SGRSBN receive insurance cover of Rs 401 crore

Over 12,000 depositors of Bengaluru-based Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) -- which went bankrupt two years back -- received their deposit insurance cover on Monday.

"Total Rs 401 crore has been disbursed directly into the bank accounts of 12,014 depositors. The remaining eligible account holders will get the amount before December 10," BJP's Lok Sabha South Lok Sabha member and the party's Yuva Morcha National President Tejasvi Surya told media here on Monday.

SGRSBN, located in Bengaluru South, received a total of Rs 753.61 crore as deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC) towards 21,983 claims, he said.

There are 43,619 depositors in SGRSBN, on which the RBI had imposed regulatory restrictions on January 10, 2020 after a fraud of presenting fake profit and loss statements came to the fore.

There are a total 33,390 account holders with deposits of up to Rs 5 lakh in the cooperative bank and majority of them are senior citizens and from the middle-class.

When the bank went bust, it had a total deposit of Rs 2,403 crore while a Rs 1,438 crore loan was given by the bank. The non performing assets of the bank was Rs 1,438 crore. Around 27 borrowers have borrowed upwards of Rs 927 crore, Surya said in a statement.

Under the DICGC, the government has started distributing money to deposit holders of 16 stressed banks including SGRSBN up to Rs 5 lakh on Monday.

Last year, the government brought cooperative banks under the purview of the RBI by amending the Banking Regulation Act. Again earlier this year, the government raised the deposit insurance cover from Rs 1 lakh to Rs 5 lakh to be settled within 90 days of filing an application by amending the DICGC Act.

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