The Centre and the Reserve Bank of India (RBI) are at loggerheads on the revival of the Gujarat-based Madhavpura Mer- cantile Cooperative Bank.
While the RBI is in favour of liquidating the bank and setting up a new entity under a new name (Bharatiya Sahakari Bank) and a new board, the Centre has decided to revive the existing bank which went bust following its massive exposure to Ketan Parekh.
The bank will now be reconstituted under Section 45 of the Deposit Insurance & Credit Guarantee Corporation (DICGC) Act. The RBI has, however, decided against active participation.
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DICGC is planning to pump in Rs 402 crore against Rs 464 crore as had been announced earlier. Sources close to the apex bank said a difference of Rs 62 crore in DICGC cover has being created as it follows a different method for calculating liability.
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