The Reserve Bank of India (RBI) has cancelled the licence of Pune-based Shivajirao Bhosale Sahakari Bank. The RBI said the bank ceases to carry on banking business, with effect from the close of business on May 31.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the bank as per the Deposit Insurance and Credit Guarantee Corporation (DICGC). Act, 1961, will be set in motion, the central bank said in a statement.
“As per the data submitted by the bank, more than 98 per cent of the depositors will receive full amounts of their deposits from DICGC.
“On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakh from the DICGC subject to the provisions of the DICGC Act, 1961,” RBI said.
Liquidator for the bank
The Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and appoint a liquidator for the bank, it added.
“The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions…of the Banking Regulation Act, 1949.
“...The continuance of the bank is prejudicial to the interests of its depositors,” the statement said.
The RBI observed that the bank with its present financial position would be unable to pay its present depositors in full.
According to the central bank, public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
The bank was placed under RBI Directions from the close of business on May 4, 2019.