The RBI on Thursday cancelled the licence of The Madgaum Urban Co-operative Bank Limited, Margao, Goa, as the bank with its current financial position would be unable to pay its present depositors in full.
The RBI further said that as per the data submitted by the bank, about 99 per cent of the depositors will receive full amounts of their deposits from the 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 lakh only from the DICGC.
The Office of Registrar of Cooperative Societies, Goa, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, the RBI added.
The Madgaum Urban Cooperative Bank, the RBI said, does not have adequate capital and earning prospects and has failed to comply with various provisions of the Banking Regulation Act, 1949.
Further, "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 said while cancelling the licence.
"Consequent to the cancellation of its licence, The Madgaum Urban Co-operative Bank Limited, Margao, Goa is prohibited from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits...with immediate effect," the RBI said.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors will be set in motion.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU