Mumbai : The Reserve Bank of India has cancelled the banking licence of Maharasta-based cooperative bank Shivajirao Bhosale Sahakari Bank Ltd for not having adequate capital and earning prospects. Consequent to the cancellation, the bank has been prohibited to carry out banking business which includes acceptance of deposits and repayment of deposits with immediate effect.
“The Reserve Bank of India (RBI) has, vide order dated May 28, 2021 cancelled the licence of Shivajirao Bhosale Sahakari Bank Ltd., Pune, Maharashtra. Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 31, 2021. The Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank” RBI said yesterday.
The Reserve Bank has cited several reasons for cancellation of the license including not having adequate capital and earning prospects, failed to comply with certain sections of Banking Regulation Act, 1949. The central bank has said that the continuance of the bank is prejudicial to the interests of its depositors, the bank with its present financial position would be unable to pay its depositors in full and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of Shivajirao Bhosale Sahakari Bank Ltd., Pune, Maharashtra as per the DICGC Act, 1961 will be set in motion. As per the data submitted by the bank, more than 98% of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs. 5,00,000/- (Rupees Five lakh only) from the DICGC subject to the provisions of the DICGC Act, 1961.