The Reserve Bank of India (RBI) has cancelled the licence of the Pune-based Shivajirao Bhosale Sahakari Bank. The reason cited the absence of adequate capital and earning prospects as the reason behind the cancellation.
As per data submitted by Shivajirao Bhosale Sahakari Bank, more than 98 per cent of the depositors will receive full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said in a release.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from the DICGC.
Giving details, the RBI said the bank does not have adequate capital and earning prospects and as such, it does not comply with the certain provisions of the Banking Regulation Act, 1949.
"The continuance of the bank is prejudicial to the interests of its depositors," it said, adding that the bank with its financial position would be unable to pay its present depositors in full.
While cancelling the licence, effective close of business hours on Monday, the RBI said public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
The Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator.
The release further said consequent to the cancellation of its licence, Shivajirao Bhosale Sahakari Bank is prohibited from conducting the business of banking, including acceptance of deposits and repayment of deposits, with immediate effect.
(With PTI Inputs)
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