A large number of cooperative banks have suffered a set back in the last one fiscal. with nearly 26 cooperative banks failing in operations, as much as Rs 268 crore has had to be shelled out by credit insurance agencies to the depositors with these banks.
The series of inability to operate on the part of cooperative banks was visible in the fiscal prior to that too with 29 cooperative banks closing operations in 2009-10.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) offers depositors a repayment of Rs 1 lakh maximum if in case the cooperative bank in which they had held deposits fails operations and is declared insolvent by RBI.
In the last fiscal, as many as 10 banks in Maharashtra, 6 in Gujarat and 5 in Karnataka have closed down during this period.