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CKP Co-operative Bank licence cancellation: RBI says 99.2% of depositors to get full repayment

Under the DIGC scheme, full recovery for those accountholders is allowed who hold funds of less than Rs 5 lakh

twitter-logoBusinessToday.In | May 3, 2020 | Updated 20:59 IST
CKP Co-operative Bank licence cancellation: RBI says 99.2% of depositors to get full repayment
A day after licence cancellation of the bank, RBI issued a clarification on Twitter to pacify the accountholders of the lender

The Reserve Bank of India on Sunday said 99.2 percent of The CKP Co-operative Bank's 1.32 lakh customers will be eligible for full recovery of their funds under the DICGC scheme when the bank is liquidated.

Under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, full recovery for those accountholders is allowed who hold funds of less than Rs 5 lakh in case the bank goes bust.

A day after licence cancellation of the bank, RBI issued a clarification on Twitter to pacify the accountholders of the lender.

RBI's CGM - Communications Yogesh Dayal in a tweet today said, "Out of 132170 depositors of the bank, about 99.2% will get full payment of their deposits from DICGC."

On Saturday also, the apex bank said all depositors will be covered under the deposit insurance scheme of the DICGC but did not specify how many of the bank's customers had accounts having less than Rs 5 lakh.

The limit of the DICGC scheme was increased from Rs 1 lakh to Rs 5 lakh after the PMC Bank episode.

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On May 2, the RBI cancelled the licence of CKP Co-operative Bank, with effect from the close of business on April 30, 2020. On liquidation, depositors are entitled to repayment of their deposits up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions, the RBI said in a press release.

"The financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible," the RBI said.

The Registrar of Co-operative Societies, Pune, Maharashtra, has been asked to issue an order for winding up the affairs of the Mumbai-based CKP Co-operative Bank and appoint a liquidator for the bank, it said.

The Dadar, Mumbai-based CKP Co-operative Bank had deposits of Rs 486 crore. It was established in 1915.

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