As a result, the bank will cease its banking activities with effect from the closure of operations on September 22.
The Commissioner for Cooperation and Registrar of Cooperatives, Maharashtra, has also been requested to issue an order for the dissolution of the bank and to appoint a liquidator for the bank.
Following are the reasons given by the central bank for the revocation of the licence:
– The bank has insufficient 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.
– The bank has not complied with the requirements of Articles 22(3) (a), 22(3) (b), 22(3)(c), 22(3) (d) and 22(3)(e ) ) read with Section 56 of the Banking Regulation Act, 1949;
– The survival of the bank harms the interests of its depositors;
– The bank with its current financial position would not be able to pay its current depositors in full; and
– The public interest would be harmed if the bank were allowed to continue its banking activities.
Upon liquidation, each depositor would be entitled to receive the amount of deposit insurance claims from his/her deposits up to a monetary ceiling of Rs 5 lakh only from the
According to the data submitted by the bank, about 99 percent of depositors are entitled to receive the full amount of their deposits from the DICGC. On 13 September, the DICGC has already paid Rs 193.68 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 on the basis of the willingness received from the bank’s concerned depositors.
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