RBI cancels licence of Maharashtra-based Independence Co-operative Bank

The Reserve Bank of India cancelled the licence of Nashik-based Independence Co-operative Bank Ltd and began the process for winding it up following the erosion of the bank's capital.

The bank has stopped operation from the close of business on February 3, putting depositors of the bank in trouble.

They would however receive up to Rs five lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC), after the bank's liquidation. RBI has told the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra to issue an order for winding up the bank and appoint a liquidator.

As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC, RBI said. As on January 27, 2022, DICGC has disbursed Rs 2.36 crore of the total insured deposits.

The continuance of the bank is prejudicial to the interests of its depositors, RBI observed, as the bank did not have adequate capital and earning prospects. "The bank with its present financial position would be unable to pay its present depositors in full," the central bank said.