The Orissa High Court has ordered a stay on the closure of the Baripada Urban Cooperative Bank till the next hearing in the case.
The State Government had decided to close down the bank on September 14 and appointed a liquidator for the purpose after the Reserve Bank of India scrapped its licence in October 2014 when its local branch became bankrupt due to excessive nonperforming 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 small and needy entrepreneurs in urban areas of the tribals-dominated district. Now, only the main branch here is operating.
The Government 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.