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RBI cancels licence of Maharashtra's Laxmi Co-operative Bank

RBI cancels licence of Maharashtra's Laxmi Co-operative Bank

The commissioner for cooperation and 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, the statement said.

RBI cancels licence of Laxmi Co-operative Bank RBI cancels licence of Laxmi Co-operative Bank

The Reserve Bank of India (RBI) on Thursday informed that it has cancelled the licence of Maharashtra's Laxmi Co-operative Bank Limited. Consequently, the bank now ceases to carry on banking business with effect from today (September 22). The bank regulator has requested the commissioner for cooperation and the registrar of cooperative societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.

The RBI said the bank does not have adequate capital and earning prospects. "As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949," it said in a statement.

The central bank said 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 present depositors in full, and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further," it added.

After the cancellation of the licence, the co-operative bank is now prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits with immediate effect.

"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 Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961," it said.  

As per the data submitted by the bank, about 99 per cent of the depositors are entitled to receive the full amount of their deposits from the DICGC.

As on September 13, 2022, the DICGC had already paid Rs 193.68 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.